Tuesday, May 5, 2009
Roubini: "Transferring Risk from Taxpayers to Creditors.. Is Fair.. These Are the Guys Who Served Alcohol to the Banks Just Before They Took Off
Roubini has a good piece in the Wall Street Journal today.
Here's the best quote:
It is highly likely that some of these large banks will be insolvent, given the various estimates of aggregate losses. The government has got to come up with a plan to deal with these institutions that does not involve a bottomless pit of taxpayer money. This means it will have the unenviable tasks of managing the systemic risk resulting from the failure of these institutions and then managing it in receivership. But it will also mean transferring risk from taxpayers to creditors. This is fair: Metaphorically speaking, these are the guys who served alcohol to the banks just before they took off down the highway.