But because we don't have a few trillion dollars to spend on bank recapitalization — with or without nationalization — this may be the best that the American political system can do for now.I actually think he misses the boat on nationalisation.
Now what is the policy most likely to discourage such recapitalization?
But public opinion about the financial rescue is not, ultimately, going to be settled by economic arguments such as the relative importance of bank recapitalization and mortgage relief.
Germany's federal government rescued a series of state-owned banks and approved a $10.9 billion recapitalization of Commerzbank.
In the early 21st century Le Monde suffered a series of woes, including a drop in sales, internal struggles, and the threat of recapitalization, which ultimately ended journalists' long-standing majority ownership (2010).
The main lesson of the Japanese experience, he said, was the need for an "early and large-scale recapitalization of the financial system," using public money.
But it may also mean that more of the $700 billion Congress authorized for the TARP will end up going toward recapitalization.
One reason is that since most of these banks have slashed their dividends to pennies, every dollar they earn essentially goes to recapitalization, instead of going out the door to shareholders.
The Wall Street Journal reported today that nearly two-thousand institutions may end up applying for recapitalization money from Treasury's TARP.
Given the scale of the crisis, Volcker viewed the taxpayer-funded recapitalization of the banking system as unavoidable, but he didn't like the additional supportive measures for Wall Street firms that were primarily engaged in the business of trading.
(As I've said before, I'm the only person who still thinks that the original TARP plan to buy toxic assets would have helped do this, if it had been done in combination with recapitalization).
