Monday, September 29, 2008

My Opinion on the Bailout

Listen to those that know better:

http://www.guardian.co.uk/commentisfree/2008/sep/29/wallstreet.useconomy

http://www.guardian.co.uk/commentisfree/2008/sep/26/useconomy.usa
In the Scandinavian banking crises (Sweden, Norway, Finland) which are a model of how a banking crisis should be resolved, most of the recapitalisation occurred through various injections of public capital rather than a government purchase of bad assets.

Purchase of toxic assets – in most cases in which it was used – made the fiscal cost of the crisis much higher and expensive (as in Japan and Mexico).