Comments on: Forget The Bad Bank… Create A Good One http://generationyinvestor.com/2009/01/29/forget-the-bad-bank-create-a-good-one/ Gen Y's Home for Investment Education, News & Commentary Sat, 14 Nov 2009 13:33:45 -0700 http://wordpress.org/?v=2.8.1 hourly 1 By: Mark Wilson http://generationyinvestor.com/2009/01/29/forget-the-bad-bank-create-a-good-one/comment-page-1/#comment-46 Mark Wilson Fri, 30 Jan 2009 15:29:14 +0000 http://generationyinvestor.com/?p=716#comment-46 I work for a brand NEW bank with zero toxic assets and a clean balance sheet. Alternext symb. HNB So far so good. I work for a brand NEW bank with zero toxic assets and a clean balance sheet. Alternext symb. HNB So far so good.

]]> By: Stephen Kline http://generationyinvestor.com/2009/01/29/forget-the-bad-bank-create-a-good-one/comment-page-1/#comment-45 Stephen Kline Fri, 30 Jan 2009 13:01:48 +0000 http://generationyinvestor.com/?p=716#comment-45 Well the thing is The Fed can't lend directly to people and businesses, only financial institutions. That's why we really need functional banks. The banks are the ones who can lend to people and businesses so they can spend and grow the economy. We wouldn't want to set the precedent of The Fed lending to non financial institutions b/c there'd be no way grab back that power after the crisis is over. Plus it'd be a mess. You'd need more people to actually make and research the loans. By creating a new bank that operated independently the government wouldn't have to bail out the weak financial institutions. The new bank would have more lending power than all the weak banks currently do. Then after the crisis has past the government would profit by receiving all the proceeds from an IPO. The key would really be the government being as little involved as possible. It would have to be a privately run bank so they can take prudent risks without having to worry about the government butting in all the time. Well the thing is The Fed can’t lend directly to people and businesses, only financial institutions. That’s why we really need functional banks. The banks are the ones who can lend to people and businesses so they can spend and grow the economy.

We wouldn’t want to set the precedent of The Fed lending to non financial institutions b/c there’d be no way grab back that power after the crisis is over. Plus it’d be a mess. You’d need more people to actually make and research the loans.

By creating a new bank that operated independently the government wouldn’t have to bail out the weak financial institutions. The new bank would have more lending power than all the weak banks currently do. Then after the crisis has past the government would profit by receiving all the proceeds from an IPO.

The key would really be the government being as little involved as possible. It would have to be a privately run bank so they can take prudent risks without having to worry about the government butting in all the time.

]]> By: Eric http://generationyinvestor.com/2009/01/29/forget-the-bad-bank-create-a-good-one/comment-page-1/#comment-44 Eric Fri, 30 Jan 2009 04:04:02 +0000 http://generationyinvestor.com/?p=716#comment-44 Couldn't the Federal Reserve do this exact same thing right now? Why bother with the overhead of creating a new bank...throw that 250 billion into the Fed and have them take care of it, to me it seems like they already fulfill the basic functions any semi-public "good" bank would need. With the base borrowing rate already near 0%, how can any bank go any lower? Couldn’t the Federal Reserve do this exact same thing right now?

Why bother with the overhead of creating a new bank…throw that 250 billion into the Fed and have them take care of it, to me it seems like they already fulfill the basic functions any semi-public “good” bank would need. With the base borrowing rate already near 0%, how can any bank go any lower?

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