Time to Nationalize Insolvent Banks
Nationalizing insolvent banks is, paradoxically, the most market-friendly way to clean up a rotten financial sector. Whereas Sweden adopted this approach successfully during its banking crisis in the early 1990’s, the current US and British approach may end up producing Japanese-style zombie banks – never properly restructured and perpetuating a credit freeze for years.
https://prosyn.org/Vl84ALv
NEW YORK – A year ago, I predicted that the losses of US financial institutions would reach at least $1 trillion and possibly go as high as $2 trillion. At that time, the consensus among economists and policymakers was that these estimates were exaggerated, because it was believed that sub-prime mortgage losses totaled only about $200 billion.