genuine question: do people actually believe this?
to state the obvious, my business incentive is to keep the loan open for as long as possible. i get paid servicing my customer.
“taking their bit...
Your incentive structure makes sense — longer loans mean more servicing fees. The real risk isn't malicious liquidation, it's contagion during volatility when multiple borrowers get margin-called simultaneously and you're forced to liquidate into falling prices. How do you manage collateral concentration risk during drawdowns?