How does the idea of “buy, borrow, die” work?
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It’s an idea for harming the bottom line of a bank. You buy something that they can’t easily repossess, like a bar of gold, with money from a loan. Then you give a friend the bar of gold before you die. The bank doesn’t paid for the loan, because you are dead, and they can’t repossess the bar of gold, because they don’t know where it is, so they have to write off the loan against their profits. Over time, this increases borrowing costs for everybody, so it’s a bad thing to do, but for a bank it’s a cost of doing business.
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