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Too Many Big Banks - downsize Finance

The popping of the housing bubble, after over construction of houses (by about 2 million), has meant a loss of jobs for some 500-600 000 workers (legal), and perhaps twice that among illegals (many going home).

The FINANCE bubble built on top of this also means too many bankers, and too many banks.

We need to help the solvent banks, and quickly let the insolvent banks die. There should probably be some 500 000 fewer bankers before the finance crisis is over.

The Big Banks, like Citi, which were too foolishly risk-seeking to avoid the high-risk derivatives, already have most of the toxic assets. They already are insolvent. There's no need for a new holding area, just let the bankrupt banks go into Chapter 7 (not 11, they're insolvent), and dispose of their assets at 20% of book value or so -- and let the solvent banks take over the good business.

Posted by: TomGrey at 12/02/08 02:24 | link | comments
economics

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