Greenspan nods to na­tion­al­is­ing banks

Finweek English Edition - - Main Stories This Week -


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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