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As Credit Crunch II looms, we must learn to escape risk of moral hazard
Telegraph ^
| 10/20/09
| Damian Reece
Posted on 10/20/2009 8:45:57 PM PDT by TigerLikesRooster
As Credit Crunch II looms, we must learn to escape risk of moral hazard
For all those people belly aching about bank bonuses and dodgy mortgage lending in recent days, a speech by the Governor of the Bank of England addressing reform of the banking system ought to have been a highlight of the week.
By Damian Reece
Published: 9:57PM BST 20 Oct 2009
Comments 2 | Comment on this article
But as Mervyn King told his Scottish business audience last night: "If our response to the crisis focuses only on the symptoms rather than the underlying causes of the crisis, then we shall bequeath to future generations a serious risk of another crisis even worse than the one we have experienced."
This is no empty threat. At the heart of the boom last time round was a belief that the notion of risk had fundamentally changed. Banks and other financial institutions invented whizzo ways to borrow and lend ever larger amounts but at the heart of the system was the principle that central banks, including ours, would be lenders of last resort.
(Excerpt) Read more at telegraph.co.uk ...
TOPICS: Business/Economy; News/Current Events
KEYWORDS: bubble; creditcrunch; moralhazard
To: TigerLikesRooster; PAR35; AndyJackson; Thane_Banquo; nicksaunt; MadLibDisease; happygrl; ...
You can talk to bankers but they don't seem to care. Even under government/Fed bailout, they can still privatize their gains, while socializing their loss.
2
posted on
10/20/2009 8:48:57 PM PDT
by
TigerLikesRooster
(LUV DIC -- L,U,V-shaped recession, Depression, Inflation, Collapse)
To: TigerLikesRooster
Even under government/Fed bailout...These days, it appears that it's "Especially under government/Fed bailout...
To: ProtectOurFreedom
Yes, what it is supposed to be done is not the same as what it is actually done.
4
posted on
10/20/2009 8:53:34 PM PDT
by
TigerLikesRooster
(LUV DIC -- L,U,V-shaped recession, Depression, Inflation, Collapse)
To: TigerLikesRooster
This truthful headline is crucial!!!
The moral hazard has blown America nearly out of the water!!!
5
posted on
10/20/2009 8:55:48 PM PDT
by
SierraWasp
("Homeland Defense" begins at HOME!!! He who hesitates, is LOST!!!)
To: TigerLikesRooster
Governments have done nothing but re-inflate the moral hazard baloons across the landscape since the crash.
6
posted on
10/20/2009 9:01:19 PM PDT
by
Uncle Miltie
(President Obama got the Nobel Prize and my ass is still sitting in Afghanistan. Its not fair. - G.I.)
To: TigerLikesRooster
Good post. Sadly, it looks like even Obama has sold out to the Wall Street boys.
parsy, who wishes things were different
7
posted on
10/20/2009 9:39:08 PM PDT
by
parsifal
(Abatis: Rubbish in front of a fort, to prevent the rubbish outside from molesting the rubbish inside)
To: parsifal
Zero's first and only rule: Pay off your cronies no matter what.
8
posted on
10/21/2009 12:23:34 AM PDT
by
TigerLikesRooster
(LUV DIC -- L,U,V-shaped recession, Depression, Inflation, Collapse)
To: TigerLikesRooster
9
posted on
10/21/2009 8:02:15 AM PDT
by
GOPJ
(Liberal NFL doesn't think Rush is good enough for them? They feel the same about us-BOYCOTT)
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