Literally changing the law in order to allow bypassing a shareholder vote?
I get that it's an emergency, but I think people ought to find this hard to accept. At the same time it's a warning about size: CS has grown so big and so integral to the Swiss economy that the tail wags the dog. Let something grow to this size and it falls outside of the control of ordinary democracy. When bad things happen to an essential institution you end up doing things that are against your own principles.
People will rightly be asking how the government ends up paying for it when things go wrong but shareholders get paid when they go right.
>> ... government ends up paying for it when things go wrong but shareholders get paid when they go right.
A sizable percentage of the population sees this as a valid role for government. Every time the stock market dips a little, or home prices flatten off, people scream for the government to do something. Dumping government money into private entities to protect "shareholder value" is why stocks have risen so dramatically in the last 15 years. An entire generation has grown up thinking this is not only normal but that the party should never stop. The goal at every publicly-traded company is to become dominant enough to qualify for such protection (ie be just slightly more important than Lehman Bros was).
Hasn't happened a lot since the privatisation movement in the 90s but it's not unprecedented. Most recent example is however South America (Argentina, railways) I guess.
Everyone in US would be sprinting to nationalize the big banks if that would pose any threat to national wealth or allow other countries (china!) to be more influential.
Since the famous “it’s the economy, stupid!” each and every US President has taken upon himself to support said economy and to make it thrive, because that’s what was getting the electorate’s votes.
That has mostly meant trying to support the stock market/share prices, but under the current ideological circumstances it wouldn’t surprise me if the US Government were to help other sections of the economy, like housing.
This is nitpicking but it is not the government who pays, it is the taxpayers and in the end, every citizen. I think the distinction matters in this case.
This is backwards. The government created the money, it is us who need it (to pay taxes). The government doesn't need taxes, as it is the origin of the money.
This is false, and doubly so in this case. There is no taxpayer money involved that would go missing elsewhere. Central bank money - which is free - is what props up the deal.
Well, you could make the argument that the base state of business is that your profits are taxed but your losses are your own. There are exceptions (plenty of them!) to this rule, but it is the base dynamic.
The argument is not about government intervention per se, but about hypocrisy -> it's somehow okay for Government to bail out banks, but not students/school meals for kids/any other cause for the common man
"Sovereign is he who decides on the exception.” - Carl Schmitt [0]
This is just revealing who is in charge. The state with some mix of banking and corporate interests. Certainly it is not the people, nor is the law as written sovereign.
In Switzerland, perhaps more than any other place, it truly is the people who are in charge:
- There is no "he". Switzerland has no single person in a position of power above all others. Even the "head" of government is a council of 7 from a variety of political parties.
- Any alterations to the law can be (and are) challenged by referendum.
- Changes to the constitution can be (and are) put forward by the people and voted on by the people.
The people have a say on everything from whether cows should keep their horns [0] to whether the country should spend several billion buying new fighter jets [1].
I understand all this. I'm specifically refuting the "truly" qualifier. Nominally, and in various day to day issues, they may be given some degree of say yes. I would argue this is only in so far as they are delegated or granted this by actual power.
And I did not mean to imply that power can only ever reside in one unitary leader. It is almost certainly always distributed to one degree or another, even in absolute monarchy. But, crisis times reveal where majority of the de facto rather than de jure power resides in reality, despite our assumptions, and I don't think it is ever in the hands of the collective masses more than some minority groups/institutions.
I'm not a believer in populism, think rather the Italian school/elite theorists[0] were right who describe how power is most often wielded by a minority, whether individual or oligarchic group(s) mostly because it is much easier to organize on the small group level, and the public is always more disorganized and less aware about inner workings of the system which over time enables factions to consolidate power away from the disorganized broad masses. The demos can here and there express their will for a time, for example by supporting some elite leader or faction/party, but ruling/governing over the long term is nearly impossible for the masses to direct political outcomes. Once set up the insiders have an asymmetry they can leverage in all sorts of ways.
Good book giving broad overview of some of these political ideas and thinkers including Mosca,Pareto,Michels,Schmitt,Jouvenel, Burnham,Francis, Gottfried:
The people are given a say on all sorts of things until circumstances arise where the people and laws are against the interests of real power, and then these nominal structures are simply ignored.
>perhaps more than any other place
I'll grant that this relative comparison may be true. It's only a matter of time until entropy degrades this special situation and bureaucratic and institutional inertia consolidate power into the hands of insider elites like every other instance.
>Any alterations to the law
They are breaking the law right now, the people's will and the law are irrelevant here in terms of actually preventing this action.
Machiavelli would say the people do have to be placated and their interests served to a large degree else you will end up with civil war, so they aren't "powerless", and they need to grant legitimacy of the system that rules over them (for things to work well), but they are not in charge.
In Europe we used to have a dual system with a capitalist and a socialist part. Companies are capitalist and try to grow. The socialist governement tries to put limits to what is allowed. But now we have more neoliberal governments and the market can often do what it wants. People voted for more liberal politic parties. Governments loosened the rules and the trimmed down on inspectors. And now shareholders and the CEO can just earn money almost without limits.
At this point I believe this would be the best solution. It would prevent mass layoffs and prevent UBS getting put into a critical situation because of the bad CS assets. For the tax payer it sucks but if we are bailing them out, then the bank should be ours.
If something is too big to fail it should be nationalized or broken up.
It isn't worthless, it has 13% liquidity unlike for example Lehman Brothers in 2008 which had less than 3%. Biggest issues is the trust which is gone. CS has actually been on a turn around since last year. New leadership and new goal including significantly reducing investment banking.
If it is exactly worthless (meaning the equity is worth $0, but everything below equity in the capital stack can still be serviced) then the government is getting it at a fair price while doing something good along the way.
For all the valid criticism of the handling of the 2008 crisis (e.g. moral hazard, unfairness vs the people that had their property foreclosed) it is worth to point out that the US government at large has made profit on the bailouts. Most of the assets recovered and were later either sold or expired, all together at a nice profit. I.e. the US government has successfully "bought the dip" from "panic sellers".
> it is worth to point out that the US government at large has made profit on the bailouts.
Has it though? While it's true that proceeds under TARP exceeded spendings, the government has had to hold those assets for years, and had to pay interest on its borrowings during that time. Those interest payments might well have exceeded the profits of the asset sales.
Conveniently the short rate, the Fed funds rate was 0.00% - 0.25% until 2016, so I would say yes :)
Also, even if it had to pay a little bit when adjusted for the cost of borrowing it's still a massive win. After all the government is nominally not a for-profit institution but rather an entity that helps their citizens (or at least tries to). But in this case it definitely turned out a lot better than one might have predicted at the time the program was launched.
Youre not accounting for inflation. The value of a dollar today is much more than the value of a dollar years later. Especially when inflation is 6%. The bailed out banks received $426B year 2008 dollars and the TARP dollars recovered are $442B 2014 dollars.
In real terms, the Treasury should have recovered $467B 2014 dollars for its investment to have a 0% real rate of return. In fact, $25B real 2008 dollars were given to banks and never recovered.
That does not matter because the Treasury funded it with their t-bonds and t-bills, not with CPI (with a small exception for the TIPS notes). The US government is running with a constant debt unlike say Saudi Arabia which has a massive fund. Though they also have bonds.
Let me illustrate this with an example:
1. I borrow $1M at 5% p.a., for a year
2. I lend out this $1M to someone else at 7% p.a., for a year
3. A year passes
4. My debtor has not defaulted! Great, I collect my $1.07M
5. I pay back $1.05M
6. I am $20k ahead
Nowhere in the above logic we need to know what happened to the CPI or any other inflation measure.
Interference of this sort in financial markets shouldn't happen. It invalidates the market aspect of it and transfers risk to the taxpayer.
If the government wants to step in and effectively asset strip the company in order to soften the blow on individuals I don't really have an issue with that but the institution shouldn't continue to exist if it can't meet its primary purpose.
Currently in my view the only solution. The solution with UBS is not supported by the people. The Swiss National Bank (SNB) has basically unlimited money power. Credit Suisse is not technically insolvent like Silicon Valley Bank but lacks trust in the market. The risk is too high that the contagion spreads to UBS and only defers the problem to a later date (what will we do with UBS).
SNB should have already reacted much earlier and they are partly responsible for the problem (along with management and the biggest shareholder and their CHF 50B line but which they asked to be secured). It's high time to send a powerful message before Monday.
And for the SNB it's easy to buy all bonds in the market at a distressed level and make a hefty return. This is better than to invest their currency reserves in the stock market.
Edit: Added last two sentences.
I 100% agree and I hope it goes into this direction. The state also has more power to push back on fines that are incoming from other states regarding tax evasion etc. which UBS would have to deal with putting it into a bad situation.
> buy all bonds in the market at a distressed level and make a hefty return.
How? They can't sell the bonds. And holding the bonds to maturity is questionable since CS may likely default. If it doesn't default, it would be thanks to a lifeline thrown by...SNB. So yeah, no idea what you're on about there.
Why sell it? The SNB doesn't need to sell them and yes they can hold them to maturity. They can also give a larger credit line to CS and CS can buy back all the bonds from investor that want it. At CHF 100B it's a CHF 50B - 20B capital injection.
The derivatives and trading arm is what’s of concern here. Bonds and rates are a paper covering for trillions in swaps: bad bets that need to be repaid. These swaps may involve the solvency of US institutions.
Credit Suisse was involved in loads and loads of scandals. Joe Blogs summarized loads of them in a video: https://youtu.be/tAJRqpDqjLU?t=325
It's insane that this questionable bank which continuously says "problems have been addressed" scandal after scandal is now being saved. Public losses, private profit.
Unfortunately other banks, too. Not something to mention specifically in this case. We must admit that banks have gone too big and need to be split up in the future.
If we withhold help purely based on evidence of shady dealings then JPM, HSBC, DB, Well Fargo, Goldman and a whole butch of others should be liquidated by Monday lunch time in solidarity.
Personally i hate the barter system so i suggest we find a different judgement metric.
There were 4-5 banks that sold equity swaps to Archegos. CS and Nomura lost the race to the exits to GS and MS who exited first, and ended up holding the bag.
$BankName was involved in loads and loads of scandals. Its a way of life for Banks. Gets boring after a while. If you are around a bank, make sure your wallet is tightly secured to your body...
JP Morgan Chase:
"Scandals and scandals...agreed to pay the government $13 billion in penalties. Entered into “deferred prosecution agreements”, manipulated US Market...Paid $2.5 billion fine for failing for two decades to report activity by client Bernie Madoff, etc...etc.." - https://www.theguardian.com/business/2020/sep/29/jpmorgan-ch...
It is not a crazy idea. This bank is significant to the G7, and if the Swiss government does decide to intervene and take control, it doesn't necessarily mean the bank is being rescued. The situation is much more complex than simply equating public losses with private gains. If Switzerland takes over the bank, it will be an unprecedented event in history, and I would bet that it would be beneficial for customers in the medium to long term.
How does a bank owned by the state ensure the constitutional right given to Swiss citizens to banking secrecy? If you can answer this question in a way in which the government doesn't get banking information it by law shouldn't have, I could maybe see it as good news for customers... otherwise they will just provide a systematically inferior service than other, privately owned, banks in Switzerland.
The whole banking secrecy thing is just another way to hide all of the money laundering, drug money, and tinpot African dictator money these banks have been holding all of these years.
The good news is folks in government are probably pretty implicated in this, so they will probably try to make sure there is a pretty strong partition.
At this point banking secrecy must already have become a myth, hasn’t it?
Of course, if you’re the government of an African country trying to get to the accounts of some former strongman that used to rule the country I’m pretty sure that the secrecy is still there, but confronted against more persuasive powers (like the US in the recent past, most probably also the EU and the Swiss national government) I don’t think that said secrecy stands any chance.
There is no such thing as a "constitutional right given to Swiss citizens to banking secrecy". Swiss constitution does not provide anything of sort [1]. The "Banking Secret" is defined at art. 47 of the Federal Law on Banking [2] and it has a rather narrow definition.
So there is no such thing as "banking secret" for Swiss residents. Hence even if Credit Suisse is nationalized, it won't change anything for their customers, except perhaps an increase in trust.
They also have their tendrils into so many things, it’s likely ‘too big to fail’ for Switzerland. Potentially other countries too.
It’s an effective, albeit evil play I guess. A bit like a tumor metastasizing into an organ that is too dangerous to operate on, so it can’t be removed.
When a company is nationalized what typically happens to the shareholders? Are they wiped, do they get paid out, or does some of their ownership carry over to the new entity (rights to a special dividend or something)?
The article talks about "full or partial" nationalization. I have no idea how a full nationalization would look like, but typically, a company is only partially nationalized. The state takes a large equity stake, diluting the ownership of previous shareholders.
Note that long term shareholders have already been pretty much wiped out. CS was worth almost $300B before the GFC, and down 70x to around $8B Friday. Apparently UBS was uncomfortable offering more than $1B for it today, so already down a further 8x since then.
The just solution here is to let CS fail, and jail the executives if they find evidence of fraud or other crimes. Make the depositors and bond holders whole to prevent contagion.
Okay but the CS name and brand is worth mud now. No one is ever going to bank with them again after this? How is propping them up meaningfully different than letting them die?
By the state taking over you are giving the bank what it needs which is new trust. The top management will be replaced and the state will not only guarantee the assets but also give the bank the trust it needs.
The SNB tried to just give them money but as you said the name is so toxic at this point you need new management which is either UBS taking control or the state.
It will continue to be used by the same customers. Swiss Nationals who don't have much choice and the tax evadors /drug lords/dictators who again chose it because they don't have many options.
The legend of the Swiss Bankink System was based on this later type of customer because as quality of day to day service for normal people or business they have fallen far behind.
In practice wouldn't this just mean part nationalizing the bank so you can keep paying the salaries of all the various bank tellers, IT staff, and accountants to allow the depositors and bond holders to withdraw their money.
Given the retail bank is highly profitable wouldn't it make sense to then keep the whole thing going and figure out how to re-privatize it at a later date?
Not the least because on paper at least it looks healthy. It has capital and liquidity ratios in line with other major banks. It has a profitability problems but had started laying off thousand of staff already, so that was more a share price problem than credit risk problem. But bank runs don't look at financials.
But if you make depositors whole, we'll have to switch to banks as custodial accounts. These private companies can't make huge profits off of deposits in good times and be, essentially, insured by tax payers in bad times.
> we'll have to switch to banks as custodial accounts.
Isn't that effectively what Glass-Steagall, a law passed after one of our previous massive failures, mandated?
> These private companies can't make huge profits off of deposits in good times
If they were, then why were interest rates so low? Either way, I figure the river of low interest government money was what made them so profitable, and now that this tap is turned off, the reason they're immediately failing.
> insured by tax payers in bad times.
If deposits equated to profits, then what is the current source of "stress?"
Not an expert, but the scary thing here are all the secondary and tertiary side effects of having a huge financial institution fail. For example lowered confidence in the banking system and Swiss are known for their banking.
I don’t think that’s fair. CS is a GSIB. We can wipe shareholders, but (unlike SVB) it’s a lot less clear what can be done with bond holders without threatening the stability of the global financial system. Probably the central bank will have to buy the bonds at a bargain and hold them to maturity.
112 comments
[ 5.8 ms ] story [ 170 ms ] threadI get that it's an emergency, but I think people ought to find this hard to accept. At the same time it's a warning about size: CS has grown so big and so integral to the Swiss economy that the tail wags the dog. Let something grow to this size and it falls outside of the control of ordinary democracy. When bad things happen to an essential institution you end up doing things that are against your own principles.
People will rightly be asking how the government ends up paying for it when things go wrong but shareholders get paid when they go right.
A sizable percentage of the population sees this as a valid role for government. Every time the stock market dips a little, or home prices flatten off, people scream for the government to do something. Dumping government money into private entities to protect "shareholder value" is why stocks have risen so dramatically in the last 15 years. An entire generation has grown up thinking this is not only normal but that the party should never stop. The goal at every publicly-traded company is to become dominant enough to qualify for such protection (ie be just slightly more important than Lehman Bros was).
Interested in any source here.
That has mostly meant trying to support the stock market/share prices, but under the current ideological circumstances it wouldn’t surprise me if the US Government were to help other sections of the economy, like housing.
There was a famous intervention by the previous speaker of the house (Pelosi) saying “we are giving them our money”…
That is why I started by saying “nitpicking” but in the end, it is the State’s money (or the taxpayers’, which is equivalent), not the Government.
The government has no momey, it cannot pay anyone (in a Republic, mind you).
Meanwhile if CS blows up and the country enters a recession, tax dollars will be lost.
Intervening may be cheaper than the alternative.
This is just revealing who is in charge. The state with some mix of banking and corporate interests. Certainly it is not the people, nor is the law as written sovereign.
[0] https://en.wikipedia.org/wiki/State_of_exception
- There is no "he". Switzerland has no single person in a position of power above all others. Even the "head" of government is a council of 7 from a variety of political parties.
- Any alterations to the law can be (and are) challenged by referendum.
- Changes to the constitution can be (and are) put forward by the people and voted on by the people.
The people have a say on everything from whether cows should keep their horns [0] to whether the country should spend several billion buying new fighter jets [1].
[0]: https://www.swissinfo.ch/eng/politics/november-25-vote_are-c...
[1]: https://www.swissinfo.ch/eng/fighter-jet-challenge-called-of...
And I did not mean to imply that power can only ever reside in one unitary leader. It is almost certainly always distributed to one degree or another, even in absolute monarchy. But, crisis times reveal where majority of the de facto rather than de jure power resides in reality, despite our assumptions, and I don't think it is ever in the hands of the collective masses more than some minority groups/institutions.
I'm not a believer in populism, think rather the Italian school/elite theorists[0] were right who describe how power is most often wielded by a minority, whether individual or oligarchic group(s) mostly because it is much easier to organize on the small group level, and the public is always more disorganized and less aware about inner workings of the system which over time enables factions to consolidate power away from the disorganized broad masses. The demos can here and there express their will for a time, for example by supporting some elite leader or faction/party, but ruling/governing over the long term is nearly impossible for the masses to direct political outcomes. Once set up the insiders have an asymmetry they can leverage in all sorts of ways.
[0] https://en.wikipedia.org/wiki/Elite_theory
Good book giving broad overview of some of these political ideas and thinkers including Mosca,Pareto,Michels,Schmitt,Jouvenel, Burnham,Francis, Gottfried:
https://www.imperiumpress.org/shop/populist-delusion/
The people are given a say on all sorts of things until circumstances arise where the people and laws are against the interests of real power, and then these nominal structures are simply ignored.
>perhaps more than any other place
I'll grant that this relative comparison may be true. It's only a matter of time until entropy degrades this special situation and bureaucratic and institutional inertia consolidate power into the hands of insider elites like every other instance.
>Any alterations to the law
They are breaking the law right now, the people's will and the law are irrelevant here in terms of actually preventing this action.
Machiavelli would say the people do have to be placated and their interests served to a large degree else you will end up with civil war, so they aren't "powerless", and they need to grant legitimacy of the system that rules over them (for things to work well), but they are not in charge.
If something is too big to fail it should be nationalized or broken up.
Really puzzles me the logic of underpinning a market economy to the extent it's no longer functioning. No lessons learned from 2008 whatsoever.
Losing trust as a financial institution is, and probably should be fatal, if it justified.
For all the valid criticism of the handling of the 2008 crisis (e.g. moral hazard, unfairness vs the people that had their property foreclosed) it is worth to point out that the US government at large has made profit on the bailouts. Most of the assets recovered and were later either sold or expired, all together at a nice profit. I.e. the US government has successfully "bought the dip" from "panic sellers".
Has it though? While it's true that proceeds under TARP exceeded spendings, the government has had to hold those assets for years, and had to pay interest on its borrowings during that time. Those interest payments might well have exceeded the profits of the asset sales.
Also, even if it had to pay a little bit when adjusted for the cost of borrowing it's still a massive win. After all the government is nominally not a for-profit institution but rather an entity that helps their citizens (or at least tries to). But in this case it definitely turned out a lot better than one might have predicted at the time the program was launched.
In real terms, the Treasury should have recovered $467B 2014 dollars for its investment to have a 0% real rate of return. In fact, $25B real 2008 dollars were given to banks and never recovered.
Let me illustrate this with an example:
Nowhere in the above logic we need to know what happened to the CPI or any other inflation measure.TARP was a Treasury program, so wouldn't it have been financed by Treasury notes, which averaged about 2% during that period?
If the government wants to step in and effectively asset strip the company in order to soften the blow on individuals I don't really have an issue with that but the institution shouldn't continue to exist if it can't meet its primary purpose.
How? They can't sell the bonds. And holding the bonds to maturity is questionable since CS may likely default. If it doesn't default, it would be thanks to a lifeline thrown by...SNB. So yeah, no idea what you're on about there.
That’s why this isn’t so straight forward.
It's insane that this questionable bank which continuously says "problems have been addressed" scandal after scandal is now being saved. Public losses, private profit.
If we withhold help purely based on evidence of shady dealings then JPM, HSBC, DB, Well Fargo, Goldman and a whole butch of others should be liquidated by Monday lunch time in solidarity.
Personally i hate the barter system so i suggest we find a different judgement metric.
Archegos and Greensill alone are astounding, and those blew up in just the past 6-9 months!
https://en.wikipedia.org/wiki/Credit_Suisse#Controversies
JP Morgan Chase:
"Scandals and scandals...agreed to pay the government $13 billion in penalties. Entered into “deferred prosecution agreements”, manipulated US Market...Paid $2.5 billion fine for failing for two decades to report activity by client Bernie Madoff, etc...etc.." - https://www.theguardian.com/business/2020/sep/29/jpmorgan-ch...
Deutsche Bank:
"...Role in financial crisis of 2008, Espionage scandal, Libor scandal, Tax evasion, Russian money-laundering operations..." - https://www.dw.com/en/deutsche-banks-biggest-scandals/a-5497...
BNP Paribas:
"...Laundered US$100 billion, plead guilty in a New York state court to falsifying business records.." - https://en.wikipedia.org/wiki/BNP_Paribas#:~:text=BNP%20Pari....
Goldman Sachs:
"The primordial Octopus..." - https://en.wikipedia.org/wiki/Goldman_Sachs_controversies
Wells Fargo:
"...Created fake accounts in the names of its customers without their knowledge or consent...." - https://www.thestreet.com/banking/zelle-scam-wells-fargo
Citigroup:
"Paid $2 Billion in Enron Scandal...Was the largest U.S. lender to the apartheid government of South Africa...etc..." - https://www.nytimes.com/2005/06/11/business/citigroup-agrees.... https://www.corp-research.org/citigroup https://www.theguardian.com/business/2005/jun/11/corporatefr...
Sex Trafficking:
https://www.law360.com/articles/1587042/vi-gov-t-says-jpm-s-...
https://www.bloomberg.com/news/articles/2023-03-17/former-jp...
The good news is folks in government are probably pretty implicated in this, so they will probably try to make sure there is a pretty strong partition.
People would trade many things without being treated like criminals just for doing voluntary exchanges.
States are extremely greedy. I am of the opinion that they should know the less the better abt ur money or whatever.
On top of that look at what the current central banking policies are provoking... come on, it looks designed to empoverish us...
Of course, if you’re the government of an African country trying to get to the accounts of some former strongman that used to rule the country I’m pretty sure that the secrecy is still there, but confronted against more persuasive powers (like the US in the recent past, most probably also the EU and the Swiss national government) I don’t think that said secrecy stands any chance.
So there is no such thing as "banking secret" for Swiss residents. Hence even if Credit Suisse is nationalized, it won't change anything for their customers, except perhaps an increase in trust.
[1]: https://www.fedlex.admin.ch/eli/cc/1999/404/en [2]: https://www.fedlex.admin.ch/eli/cc/51/117_121_129/fr#art_47
If the Swiss government takes it over for 1 CHF then it’s entirely possible it’s long term a good deal for the Swiss populace.
Totally agree with you.
It’s an effective, albeit evil play I guess. A bit like a tumor metastasizing into an organ that is too dangerous to operate on, so it can’t be removed.
[1]: https://www.fsb.org/2022/11/2022-list-of-global-systemically...
JPMorgan Chase : Penalty total since 2000: $36,129,286,132
Bank of America : Penalty total since 2000: $83,354,221,356
https://violationtracker.goodjobsfirst.org/summary?parent=cr...
https://violationtracker.goodjobsfirst.org/parent/jpmorgan-c...
https://violationtracker.goodjobsfirst.org/parent/bank-of-am...
Again, depositors are saved and stock owners essentially lose all (given the low purchase price). So, whatever, I guess
Note that long term shareholders have already been pretty much wiped out. CS was worth almost $300B before the GFC, and down 70x to around $8B Friday. Apparently UBS was uncomfortable offering more than $1B for it today, so already down a further 8x since then.
The SNB tried to just give them money but as you said the name is so toxic at this point you need new management which is either UBS taking control or the state.
That's coming in any case. The water is out for miles.
Given the retail bank is highly profitable wouldn't it make sense to then keep the whole thing going and figure out how to re-privatize it at a later date?
Isn't that effectively what Glass-Steagall, a law passed after one of our previous massive failures, mandated?
> These private companies can't make huge profits off of deposits in good times
If they were, then why were interest rates so low? Either way, I figure the river of low interest government money was what made them so profitable, and now that this tap is turned off, the reason they're immediately failing.
> insured by tax payers in bad times.
If deposits equated to profits, then what is the current source of "stress?"
Because of the EU, more info is shared.
And they’re also very dated. Wire transfers are next day only (minutes to hours in the EU), Apple Pay only arrived a couple years ago…
There is much better banking in all fronts to be had elsewhere. But nationals are forced to use national banks.
oh, wait.. wrong thread.