I have what is probably a VERY naive question/proposal:
Wouldn’t it be a good idea for the government, if they’re going to spend all this money, to fund private entities to start “GOOD” banks? These banks would have no toxic assets. They could selectively buy assets from existing banks after a thorough audit of each loan. That’s what the market seems to be crying for: a bank that is free of toxic debt.
The new banks would be exempt from CRA[p], FDIC, the Federal Reserve, state banking laws, and other requirements so they can build value and provide loan stability in a market environment.
I don’t know about everyone else but I am tired of the government using banks as political pawns. No industry is as regulated and scrutinized as banks, and their industry is in the worst trouble. We need good, solid banks that operate on free market principles. I would guess we haven’t had one of those for close to 100 years.
There’s no quick fix to this problem. The toxic loans have to be audited one by one. It’s a ton of work, but there’s no way around it.
You seem to overlook the obvious. You want the government that caused the problems to undo what they are committed to in an attempt to solve said problem. Not very much attuned to the governing class, are you? Especially when everything they have done and hope to do is an extension of their earlier actions.
well I am tired of the banks using government as a politcal pawn.
Sounds like a good idea. But aren’t many of the D.C. politicians friends of those who run the current big banks? I think they’re just repaying their friends.
Also, if these banks fold, wealthy politicians lose all of their stock value (as would the rest of the country). A total market crash they don’t want to see.
Not that I understand anything to do with financial stuff. An informed relative explained a little bit to me.