Summary
The US has seen some dramatic and unprecedented action by the Fed that has resulted in preventing a complete collapse of the financial system, but it hasn't fixed much for the future. Many say the RTC and FDIC were the creators of this moral hazard back In late 1980s. But the new "Cltl-way" Is not the way the FDIC handled big banks when they were In such bad shape they needed help. They used what was known as the bridge bank, which was created to take over assets and liabilities and a financial operations of the bank that failed. The author believes that the concept of the bridge bank ought to be put back Into use In cases like Citicorp. Certainly the government is providing the funds to keep it solvent, so the government ought to own the bank. Government ownership would be a least-cost solution, since the whole bank would belong to the FDIC.
See the full content of this document
Extract
It Will Get Better - but Not Soon
The good news is that oil is under $50 a barrel. The bad news is the recession Is going to get worse before it gets better. I surely get tired of hearing (and talking about) the bad news, even though it has been ac...
See the full content of this document
Sponsored links
