Another Strong Voice for Nationalization of Some Banks
In this article from the Wall Street Journal, Nouriel Roubini says:
Mr. Roubini tells me that bank nationalization “is something the partisans would have regarded as anathema a few weeks ago. But when I and others put it in the context of the Swedish approach [of the 1990s] — i.e. you take banks over, you clean them up, and you sell them in rapid order to the private sector — it’s clear that it’s temporary. No one’s in favor of a permanent government takeover of the financial system.”
There’s another reason why the concept should appeal to (fiscal) conservatives, he explains. “The idea that government will fork out trillions of dollars to try to rescue financial institutions, and throw more money after bad dollars, is not appealing because then the fiscal cost is much larger. So rather than being seen as something Bolshevik, nationalization is seen as pragmatic. Paradoxically, the proposal is more market-friendly than the alternative of zombie banks.”
Text: Prof. Nouriel Roubini’s Congressional Testimony, October 30 | Dr. Doom Speaks
Prof. Nouriel Roubini testified today before the U.S. Congress Joint Economic Committee.
