Crisis insurance securities, tradable insurance credits (TICs)

Proposal from academia whereby the central bank offers banks a specific type of paper for purchase in return for a fee in profitable times. In times of crisis, the paper can then be exchanged for credit guarantees for financial products threatened by a decline in value. The background to this idea is that the central bank’s guarantee would prevent any panic selling and thus significantly reduce the economic losses of a crisis. – Critics pointed out that such crisis-proof securities could encourage banks to engage in careless business practices. – See moral hazard.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/