The current banking situation is not anything close to a free market.
If banks make bad loans and bankrupt themselves, they should go out of business. As we saw, when they did just that, not only did they not go out of business but they got trillions in government intervention to prop them up.
That’s the reason for your point #2. There is NO risk to the banks, every loan made is free money.
“If banks make bad loans and bankrupt themselves, they should go out of business.”
Bankers make bad loans.
Bad bankers should have a seriously crimped future lifestyle.