More tax money going to bail out the wealthy
Monday, March 31st, 2008What happens when the Federal Government takes over banks who have gone “into the red?” (1) Wealthy investors get to reclaim the money they lost through risky transactions, and (2) the American taxpayer gets screwed. Wow! That sounds familiar folks!! For almost everything done by the government, wealthy people gain, and the working people lose. I think it’s way past time to take our country back folks!
…Oh - and - by the way - since WHEN does the United States of America have to look to Norway for help in solving problems?
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Fed eyes Nordic-style nationalisation of US banks
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 2:58pm BST 31/03/2008
The US Federal Reserve is examining the Nordic bank nationalisations of the 1990s as a possible interim solution to the US financial crisis.
The Fed has been criticised for its rescue of Bear Stearns, which critics say has degenerated into a taxpayer gift to rich bankers
The Fed has been criticised for its rescue of Bear Stearns, which critics say has degenerated into a taxpayer gift to rich bankers.
A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis from 1991 to 1993, which brought the region’s economy to its knees.
It is understood that Fed vice-chairman Don Kohn remains very concerned by the depth of the US crisis and is eyeing the Nordic approach for contingency options.
Scandinavia’s bank rescue proved successful and is now a model for central bankers, unlike Japan’s drawn-out response, where ailing banks were propped up in a half-public limbo for years.
While the responses varied in each Nordic country, there a was major effort to avoid the sort of “moral hazard” that has bedevilled efforts by the Fed and the Bank of England in trying to stabilise their banking systems.
Norway ensured that shareholders of insolvent lenders received nothing and the senior management was entirely purged. Two of the country’s top four banks - Christiania Bank and Fokus - were seized by force majeure.
“We were determined not to get caught in the game we’ve seen with Bear Stearns where shareholders make money out of the rescue,” said one Norwegian adviser.
“The law was amended so that we could take 100pc control of any bank where its equity had fallen below zero. Shareholders were left with nothing. It was very controversial,” he said.
