Reply #13: because they were small and therefore had minimal global counterparty risks

[bossy22]

what happens when major global banks go under is alot different. Just look what happened when Lehman Bros. went under- the money market started to collapse and major companies such as Mcdonalds were unsure they were going to be able to meet their payroll due to being unable to get short term financing.

The failure of another major bank would cause a similar cascade. Bank Runs are extremely dangerous- they can turn healthy financial institutions into bankruptcy messes in a matter of hours.

There were many people in the Treasury Dept. in 2007-2008 that believed what you believed- they were proven quite wrong....