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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?
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Linda Zhou
However, in reality, as many uncertain factors can play a role in the effect the system produce, this system with both private banks and central ones cannot reach the expectation that we put on it.
On the other hand, one obivious and absolute one of those factors is corruption which is especially severe in India and China. Therefore, a system with a central bank can, at least, regulate better.
ALISTAIR DUTHIE
Linda Zhou