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Mats Kaarbö

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Central Banking or Nationalized Banks?

In the aftermath of the bubble burst in '08, Iceland took a radically different path than the United States after their financial crisis and nationalized the banks, threw some people responsible for the crash in jail and bailed out the homeowners instead of worrying about only bailing out the banks. And now they're coming back and their economy is growing again... http://goo.gl/QuKGA

When the banks in Norway declined in 1992, the government simply nationalized them (instead of bailing them out leaving the tax payer to pay the bill) which gave the banking business a breather and was ultimately beneficial for its citizens, because the banking business returned to more traditional banking values, though it only was for a short period of time.

So, in terms of public prosperity is there any merit left to keep the current central banking system, with many private banks and one central bank, instead of nationalized banks?

Topics: banking reform economics education government
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    Peter Law 30+

    • +1
    Oct 31 2012: I think that governments should keep out of banking. What is the point of individuals being fiscally prudent & then our 'leaders' getting us into debt by messing about with the banks. The power of the banks has grown out of all proportion to their usefulness, mainly due to the casino mentality that can make massive profits one day, & massive losses the next.
    If a bank goes bust it should be given a decent burial, like any other business, instead of vegetating on life support, until the cycle repeats.
    The money that I have in the bank is being moved slowly over to a little savings & loan company. They put savers & borrowers together for the princely sum of 1% instead of the 11% or so taken by the banks. We get a good return, & small business gets finance at a more competitive rate. To me this is the way forward & means finance is targeted at where the businesses need it, & the casino's can carry on using someone else's money. The sooner the government turns off the life support the better. Tax is meant for schools & hospitals, not feeding a gambling habit.

    :-)

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