A hurricane just wiped out a coastal city's insurance market. Three insurers went bankrupt in a week. Nobody can rebuild. You run the bank that holds their mortgages. What happens Monday morning?
Monday morning I'm not asking the risk team what happened—I'm asking why we weren't prepared for the only thing that actually matters: the insurance market collapsing.
Look, I've been through this movie before. In March 2008, the Fed calls me on a Friday night—Bear Stearns is failing, can you help? We didn't panic. We didn't ask how this could happen. We executed the plan we'd built for exactly this momen...