Has the Time Come to Nationalize Struggling Banks?

February 19th, 2009

Has the Time Come to Nationalize Struggling Banks? Yes, but Carefully

After a generation of increasingly relaxed regulation of the financial services sector, the very concept seems stunning: Nationalization of banks in Europe and the United States. But with many global banks still teetering on the brink of insolvency — even after rescue efforts that have included multi-billion dollar infusions of capital and other forms of assistance — a different view is emerging. A growing number of economists — including, most recently, Alan Greenspan — now argue that temporary government takeovers of the most deeply troubled institutions may be the only remaining solution.


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