The rule for American bankers used to be simple: don't lend to anyone who needs the money. A few decades ago banks lent to rich people and to companies with an investment grade. Their profits were fairly stable, apart from the odd crisis, if only because their borrowing costs were fairly stable, too: deposit rates were fixed by regulation, and investors had precious few other places to put their money. So banks in those days carried much less risk than they do now for the same return.
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