[quote=briansd1]
Had the banks been allowed to fail, the FDIC would have taken them over which equates to wholesale nationalization (like the Northern Rock nationalization in Britain).
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The gov. does not continue to run the bank forever, though. Assets get liquidated, the FDIC moves on.
Also, it seems that banks aren’t paying enough for their FDIC insurance. If they had to pay more for it, it wouldn’t have been abused.
Nationalization as a stepping-stone to eliminating weaker banks without hosing the depositors seems a reasonable thing.
The current situation with all the bailouts and backstops IS more like nationalization than anything, except without the benefits. The govt is sharing the risk, but not the rewards of the bank. It’s the worst of both worlds, really. If the banks fail, the taxpayers are hosed, but if they make money, the taxpayers don’t make any money.
