Greenspan nods to nationalising banks
FORMER US FEDERAL RESERVE chairman Alan Greenspan has lent his support to the US administration’s decision to nationalise some banks as a short-term measure to fix the country’s financial system. Greenspan, who for years was regarded as the high priest of laissez-faire capitalism, said nationalisation could be the lesser of two evils for policy makers. LONDON’S FINANCIAL TIMES cautioned that holders of senior debt – bonds that would be paid off before other claims – might have to be protected even in the event of nationalisation. The Washington Post said temporal government ownership would allow the US to transfer toxic assets to bad banks without encountering problems of how to price them.
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