Sunday, February 15, 2009
I do not think that nationalization of banks is either necessary or inevitable. The debate on nationalization is somehow misleading. Nationalization means "the act of taking an industry or assets into the public ownership of a national government or state". Now pay more attention to the words public ownership. In fact this may refer as well to common (full-community) non-state ownership. This is to say that, in my proposal of "GOOD BANKS", there might be a public ownership in the sense that taxpayers, whose money is largely being used for recapitalization of banks, will possibly own the new good banks (private-public partnerships?). There could be an initial mechanism of subscription and lock-in of shares allotted to public (taxpayers) but in principle these shares will be tradeable from day x. In conclusion the financial case for nationalization is not compelling (particularly for those who do not like the word) and it is misleading as there could be a non-state ownership and a full-community approach to banking to save the credit system not bankers and bad banks.