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**tsaaapla** · 03-17-2008, 05:03 PM

The problem is that a failed bank damages the economy as a whole, and damages society. It's something of a catch-22 ... you don't want to bail them out to encourage more speculation, but you have to in order to prevent further failures and a lack of confidence in other banks.

Perhaps a solution would be nationalizing them, but that is not consistent with US economic policy ... but I can't think of anything else you could do that would still be a big enough penalty to discourage the ownership doing it (except sending them to jail

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03-17-2008, 05:03 PM	#5
tsaaapla Join Date Oct 2005 Posts 401 Senior Member	The problem is that a failed bank damages the economy as a whole, and damages society. It's something of a catch-22 ... you don't want to bail them out to encourage more speculation, but you have to in order to prevent further failures and a lack of confidence in other banks. Perhaps a solution would be nationalizing them, but that is not consistent with US economic policy ... but I can't think of anything else you could do that would still be a big enough penalty to discourage the ownership doing it (except sending them to jail )
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