Wednesday, 25 March 2009

bank, as in bankrupt, (culture of complicity),1518,614297,00.html

It is a pleasure to read the plain words and clear explanation of James K. Galbraith, US economist, on functionally insolvent banks and neutron loans. No need to emphasise: the pleasure is limited only to how it is said; explains why President Obama fears the “banking system could still collapse”.

…as long as the old management is in place, there are no incentives to cooperate in the evaluation you need to make.

There was clearly a systematic failure. But that does not mean there was no criminal energy around.

When a bank is insolvent, the incentives for normal banking practice disappear. They become perverse.

Carpe diem!


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