Ecuador's banking system was brought down in 1999/2000, in part, by something like this. Industry owners *became* bankers in order to lend money to their own badly run companies and self-leverage buying up more. Legitimate businesses had to figure out which bank was their competitor before they could begin to ask for a loan.

They also faced the question, "How can you win against a competitor who can create money out of thin air?"

I'm curious that Taibbi doesn't ask that question. Could it be he hasn't seen that far through the game?