Watching what happened in the UK it appeared we were making a lot of poor decisions on the hoof. In particular pushing Lloyds into buying HBOS didn't work out so well.
I often wonder what would have happened if we hadn't bailed out the banks.
Well, the UK government seemed to genuinely believe that had they not bailed them out that we might have been in a pretty bad situation: looting, troops on the streets etc.
However, with the benefit of some hindsight - I do wonder if these stories were just a bit exaggerated for political reasons.
Also, if the implosion of the payment system is an existential threat to a country then why haven't done anything to ensure that this couldn't happen again? Yanis Varoufakis mentions in one of his books that he proposed a alternate government controlled payment system that could be used if Greek banks stopped functioning - why don't we have something like that prepared to fall back on in a future crisis?
They have in the UK at least - UK Banks have been forced to ringfence core retail banking, so that other arms could be allowed to fail, but customer banking be unaffected:
Unfortunately it appears history is probably going to repeat in more ways than just cycles of crisis and financial regulation. I expect trade war and then global war in the next decade - we’ve reached around 1935 by my estimation.
Thanks - I'd never heard of that - pretty surprised that a Conservative government implemented anything like that. having said that, maybe that's why it has been kept relatively quiet?
It's probably because if you build such a system the banks would believe the government could bin them next time around and consequently make a "run on the banks" more likely.
It feels like none of this is really over and we are currently paying for it in our political climate.
An awful awful lot of uncertainty and panic would've happened I think.
It's that old saying from General Patton "A good plan violently executed now is better than a perfect plan executed next week.", I think that very much applied in this situation, as bad as things were they could've been MUCH worse.
An awful awful lot of uncertainty and panic would've happened I think.
I don't doubt that, what I wonder is if it would all be a distant memory now instead of dragging on for decades (we still have a lot more debt than before the crisis).
In the US the failing banks' owners would have shared in the loss along with the govt to the extent of deposit insurance, but the remaining institutions would have been smaller, perhaps smarter, definitely better disciplined in the knowledge that they had "skin in the game."
I often wonder what would have happened if we hadn't bailed out the banks.