Bank crisis latest - nationalise, before it's too late!
So, the Anglo-Irish Bank is to be nationalised: http://www.rte.ie/business/2009/0116/anglo.html . It seems clear that, denials notwithstanding, this is because of a run on the bank, a huge loss of confidence in it.
But why? Why would - how can - a bank that has a 100% government guarantee of its deposits face this kind of problem?
That it is poses a new moment in this vast unprecedented financial crisis, a new dilemma. If even a 100% guarantee of deposits is not enough to prevent a classic bank run, then where are we?
Where we are, is with the only option left being what the Irish government is now starting to resort to - full nationalisation even of institutions that have 100% government guarantees.
Private banks are a recipe for dangerous risk-taking behaviour and, ultimately, for corruption. Nationalised banks are less likely to be corrupt, and far less likely to engage in reckless behaviour of the kind that has driven this credit crunch. A 100% guarantee of deposits is of course potentially a recipe for reckless behaviour on the part of a bank - because the government has written them a blank cheque...
Governments need to move now to take full control of the banks. If they do not, we will see more cases like Anglo-Irish. Government support for banks, even - in fact, in some ways especially - support as strong as that being offered by the Irish government, is simply not enough.
Meanwhile, over here, shares in Barclays and other banks are plummetting... The banking crisis is in a new and extremely worrying phase... It is time to end to uncertainty! We MUST nationalise the banks now!
A failure to nationalise (and partly remutualise) the banking system very very soon may soon plunge us into a Depression.
-- Rupert Read Green Party Councillor, Norwich, and Lead Candidate for Eastern Region for the Greens in the 2009 Euro-elections. DID YOU KNOW: A vote of about 10% across Eastern Region on June 4 2009 would be enough to get me elected to the European Parliament... http://rupertsread.blogspot.com