A number of the largest banks (both here and abroad) WERE shut down, or forced into overnight mergers with stronger institutions: Bear Stearns, Lehman Brothers, WAMU, Wachovia, Northern Rock, Fortis, etc.
(And, of course the numbers will be in the hundreds when the smaller ones are added in....)
This often happened much faster then the slow-motion collapse of the American Auto businesses is being allowed to drag out....
Only some of the LARGEST, (the ones that have so many counter-parties enmeshed into their web of financial relationships and that could possibly thrust us all into a true new Great Depression were they allowed to explode the entire financial system) have been 'bailed-out' and not allowed to face bankruptcy... AIG, Citi, Goldman, Morgan Stanley....
Ask not 'why the government bailed them out' at this late date... rather ask WHY they were ever allowed to expand to such a size where they are considered 'too big to be allowed to fail'.
And ask 'where were the regulators' because... IF THEY ARE TO BE ALLOWED to be of such a size that that *always* will pose monstrous systemic risks to the entire economy... then they must be regulated like public utilities to mitigate the risks.
For, you CAN'T have BOTH "too big to be allowed to ever fail" AND "free to run any risk that they want to". |
