Thus, some customers with poor repayment ability might also get Hibernation Loans, increasing the risk of default. If things spiraled further, then eventually even customers with absolutely no ability to repay would receive Hibernation Loans in large numbers. At that point, the fuse on the explosives would be completely lit, inevitably bringing about massive defaults.
But the loans had already been bought by countless investors. After a default, it would be the investors who suffered the losses, while the people responsible for issuing the loans and selling the financial products would make a fortune. They might face legal punishment for violating lending regulations, but there would always be people willing to risk their heads for profit. Driven by enough gain, someone would always take the plunge.
Although rating agencies were responsible for reviewing these financial products, seemingly providing a professional safeguard, history had repeatedly proven that this safeguard could be more fragile than paper. Rating agencies would also lie through their teeth for money, giving financial products an AAA rating so they could get more rating contracts next time. If they gave a product a B rating, the lenders would simply go to another rating agency. In the end, only rating agencies bold enough to blindly give AAA ratings would make money, while all the agencies that issued genuine ratings would go bankrupt.
Expanding Hibernation Insurance seemed reasonable, but insurance fraud was an eternal trick. The already extremely low Hibernation default rate would inevitably rise along with the expansion of insurance. Families might tamper with things to kill their relatives for the insurance payout, while Hibernators themselves might choose to die in order to leave money for their families.
And the so-called insurance provided for financial products based on Hibernation Loans was nothing more than Credit Default Swaps under a