Comments on: Against Bank Nationalization

By: David Merkel

David Merkel — Mon, 26 Jan 2009 15:44:53 +0000

The question of what is a solvent bank is an interesting one when some assets can’t easily be valued. I’m not seeing anyone say (yet) that banks that are certainly solvent be taken over, but those that are in question very well might be.

Also, the government running banks as going concerns has myriad problems. Are they disadvantaged because the government uses them for their own purposes? Advantaged because they can borrow cheaply?

I say just let them fail, and let FDIC/RTC 2 liquidate them. Clean. Simple. FDIC insurance does the rest.

By: Andrew

Andrew — Mon, 26 Jan 2009 15:33:38 +0000

Have people really proposed nationalizing solvent banks? I thought most advocates of nationalization were aiming only at the insolvent ones.

By: David Merkel

David Merkel — Mon, 26 Jan 2009 15:24:05 +0000

RTC 2 only takes care of the insolvent, and it liquidates insolvent institutions. Nationalization can include taking over solvent institutions. It envisions running banks as going concerns.

By: Andrew

Andrew — Mon, 26 Jan 2009 14:46:56 +0000

What’s the difference between “Send the insolvent to RTC 2″ and nationalization?

By: matt

matt — Sat, 24 Jan 2009 04:00:57 +0000

Now there you go using that logic again. Just stop it already. This nation didn’t build itself to where it is today on logic. There’s no sense in starting today.