tag:blogger.com,1999:blog-23680463.post8946913717183643626..comments2023-11-05T04:40:23.785-07:00Comments on Rusty Idols: Bank Nationalization ConsensusUnknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-23680463.post-60087883282018416362009-03-11T06:40:00.000-06:002009-03-11T06:40:00.000-06:00More on the dangers of ever letting banks get 'to ...More on the dangers of ever letting banks get <A HREF="http://crooksandliars.com/susie-madrak/why-are-companies-allowed-get-big-eno" REL="nofollow">'to big to fail.'</A>Cliffhttps://www.blogger.com/profile/03487395482670731681noreply@blogger.comtag:blogger.com,1999:blog-23680463.post-87416428732950964302009-03-09T11:28:00.000-06:002009-03-09T11:28:00.000-06:00I'm not sure I entirely agree.You're certainly rig...I'm not sure I entirely agree.<BR/><BR/>You're certainly right about the Canadian system having benefitted in the past from government policies preventing further mergers. But look at the current situation. You've got five major banks, and everybody else is an almost trivial small player. All five of those banks are "too big to fail," which is why we can trust our government to provide any cash infusion which they may deem necessary, should they at any time run into difficulty.<BR/><BR/>Yes, it could be worse - but we're sitting on a "too big to fail" time bomb as it is, kept in check only by good regulation.<BR/><BR/>If it comes down to good regulation being what keeps the banking sector profitable, then one of the strongest arguments against permanent nationalization - that government bureaucrats make bad businessmen - would seem to lose some of its steam.Sixth Estatehttps://www.blogger.com/profile/04192110046214949228noreply@blogger.comtag:blogger.com,1999:blog-23680463.post-481929546222977782009-03-09T11:02:00.000-06:002009-03-09T11:02:00.000-06:00There are already models in Scandinavia and the UK...There are already models in Scandinavia and the UK to study.<BR/><BR/>For that matter Bank Nationalization in the US is routine, the FDIC takes over smaller banks almost weekly - the issue is the huge wounded giants like AIG and Bank of America. The aftermath of this crisis should be bigger banks chopped down to smaller units - Never again should there be banks that are 'Too big to fail'.<BR/><BR/>It has to be said, the Canadian government made the right choice to deny the big bank merger proposals of the last few years. Imagine if Canada had entered the current crisis with huge mega banks like BMO/Scotia saddled with huge debt from costly mergers. As it is we have one of the healthiest banking sectors in the world right now because we limited the debt a bank can carry to about half what American banks could and we don't have unweildy too big to fail entities rotting away and poisoning the arteries of the financial system.Cliffhttps://www.blogger.com/profile/03487395482670731681noreply@blogger.comtag:blogger.com,1999:blog-23680463.post-24778365830802533942009-03-09T10:25:00.000-06:002009-03-09T10:25:00.000-06:00Good analysis. I think it's plausible, but persona...Good analysis. I think it's plausible, but personally I think Obama is being too cautious with this long game - and not just because I agree with him. His approval ratings aren't exactly in freefall. The Republicans are in the midst of self-annihilation with these Limbaugh incidents. Speaking pragmatically, the opportunity would seem to be open for him.<BR/><BR/>I think it's also time to start thinking about what "temporary nationalization" might mean. Why should the people give ownership of the banks back to the private sector - and how would they go about doing it?Sixth Estatehttps://www.blogger.com/profile/04192110046214949228noreply@blogger.com