bepgof 20 Report post Posted February 3, 2013 (edited) I'm curious what happen if a bank does "run away" or say collapsed and no one takes over? Does that mean we don't have to pay installment anymore??? Bank is an intermediary in an indirect market.There are many players in such market, so there are many sellers and buyers. Unlike direct market, in usual situation, only one buyer (economic surplus unit) and seller/borrow(economic deficit unit), no intermediary. Stock market is an indirect market. IPO is a direct market in financial context.Take chicken rice stall for example. U see potential in this and lend some $ to owner to run the operation, u become 'chicken rice stall shareholder'. However, after some time, the stall landed in red figure and can't survive. Can u sell yr 'shares' away to recover the $? To who? Probably another owner who is willing/able to take over the.....otherwise, yr $ invested down to drain. This is direct market, or 1st hand market, no middle men in between.BankA who lend u $ has rights to 'sell' yr property to another bankerB(MAS rules)in order to recover $ to pay creditors. Jurisdiction comes in before 'official' windingup of business. U need to pay banker B. Remember Bank A lodged caveat against yr property?It is you who cannot 'run away'. Edited February 3, 2013 by bepgof Share this post Link to post Share on other sites
