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Politics : View from the Center and Left

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To: Steve Lokness who wrote (89653)	10/11/2008 12:20:40 PM
From: Dale Baker	Read Replies (1) of 541785

In each country, the worst risk takers will fail and be broken up among other stronger institutions. Germany's biggest mortgage lender got a massive bailout which will probably mean its eventual demise, much like Countrywide was absorbed by someone else. Banks fail when there is a lack of confidence and a run on their assets, which they can't sell off fast enough to meet withdrawals. When the national governments are giving the banks more capital and guaranteeing their deposits, there is little reason for the average person in Peoria or Munich to rush down to the bank to pull out cash. The government support will continue until the banks have unwound some of the riskier assets they took on during the credit bubble. Then I expect most of the big names to still be there.

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