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"If a bank is too big to fail, it must be broken up" watch


    if the banks had been allowed to collapse, would banks that are better structured to cope with the situation / foreign banks which were largely unaffected not just fill the vacuum left and buy up any assets owned by the bankrupted banks / provide equivilent services

    if you treated all the customers like creditors, in the event of liquidation, as they chose to put money into a particular bank, would the outcome have been better / cheaper for the taxpayer?

    If you ran the Financial Services Compensation Scheme like a commercial insurance provider and made it compulsorary for all banks operating in the uk to pay into it, based on the amount held by them, would that not be better than having the taxpayer foot the bill for money lost. (possibly similar to many companies having public liability / goods in transit etc insurance)

    surely a bank should be treated exactly the same as any other business...

    edited for some spelling errors

    (Original post by hey guysch im kl)
    The willingness of the financial sector to lend to consumers and businesses is critical to the health of the current economic model we have as growth is driven on credit. A lack of credit (due to a lack of banks to loan) will mean severe economic contraction. A period of NO loans, followed by new banks setting up and operating within an economy with negative growth, would inevitably lead to a prolonged depression.
    I think you're assuming that the bailouts will have the effect they are supposed to. Are banks lending now? Are we going to avoid a depression? Only time will tell.

    it all started with silly investment, not because they were too big.

    they should be privately owned but public in the sense, that they should be open to the government 100% for monitoring. ahem... "who monitors the monitors?" yearly randomised mathematics professors? or economists?

    as far as im aware the cause was a bubble caused by giving loans to people who COULD NOT PAY THEM and doing this for thousands of people. it should be monitored by people with no vested interest in the banks, possibly anonymous to the banks (no bribes).

    That's stupid. If a bank is too big to fail, why change it so that it can fail? The bigger a bank the better...more capital and therefore more likely to find its way out of trouble. Are they trying to say if you stored your money with a Tesco supermarket, now it has to be stored with a corner shop or something (if you get what I mean...not sure I'm making myself clear). But behind every big bank, you need someone smart making the decisions, not greedy fat cats making bad investments and throwing all the money away to people who can't afford payback.
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