LTCM reached systemically dangerous size because banks lent to it without regard to repayment capacity, and in doing so the banks endangered their own existence.
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LTCM grew as large as it did because banks lent it money without regard for whether this money could be paid back. Banks put their own existence at risk with their lending practices during this time.
restateskaal:claim:2998097-004 Banks overexposed themselves to private investment fund lending, which allowed LTCM and similar funds to grow ...
extendskaal:claim:2998097-003 Because banks and brokers had let LTCM borrow the full value of its collateral, LTCM's 4.8 billion dollars in ...
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