What is the impact on the big financial institutions and banks when?
Banks that have been prudent by securing collaterals before they offer any loans or credit facilities will not be impacted much eventhough their clients declare bankruptcy. Those bankruptcies, that were offered credit lines or loans without collaterals, would impact the banks adversely somehow. However, most banks have deep pockets, very diversified in their investments and have numerous clients of all types and sizes. They would have somehow segmented their markets and have calculated their lending and business risks earlier. Unless there is a run on the banks, I believe they would have mitigated or provided for some level of bankruptcies and would have buffered and cushioned the impact. Besides, their insurance cover would have also helped subsidize some of these financial impacts. By and large, not many big banks will fall due to limited clients being bankrupt when all the above risks controls and policies have been implemented.