FLIC

We all know what the FDIC is (Federal Deposit Insurance Corporation).  I am proposing the FLIC as a solution to avoid future financial catastrophes spreading to the commercial world.  The FLIC will be the Federal Loan Insurance Corporation which will guarantee that business loans will not be withdrawn because a bank is in trouble.
 
What happened from mid 2008 until now was that banks in trouble for bad investment decisions forced businesses to immediately repay loans.  In most cases the loans were solid, secured by solid assets.  Quick repayment of loans required businesses to fire employees and reduce the size of the business.  The financial catastrophe was transmitted directly to the commercial world because banks were forcing businesses to immediately repay loans.

I've discussed this before in earlier blogs (July) (December). 

We must separate the financial volatility, which can never be controlled because investors will always outsmart regulators, from effects in the real business world.

The FLIC will insulate jobs and business from banking and investment recklessness.