Monday, Oct 15, 2007
Moral Hazard delayed is justice denied.
Wall Street Journal Deal Blog: A Bailout for Citigroup?
Good article followed by great comments. Suddenly, I understand how banks intend to get through the great unwinding without all those embarassing bankruptcies and criminal prosecutions.
http://blogs.wsj.com/deals/2007/10/14/a-bailout-for-citigroup/
Posted by braveheart @ 10:02 PM (415 views) Add Comment
2 Comments
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1. trough2010 said...
I bet a Kruegerrand that we'll see Sarbanes-Oxley 2 for financial sector firms. US congress loves to legislate in reaction to crises... just a shame they didn't act during all those years leading up to the latest crisis. Bringing a few managers to justice is one thing, averting pension losses for millions of savers is another skill.
2. whiteknight said...
"Providing liquidity" termed as what we have seen in the past month is always a bail-out. Always.
The only way this would not go badly is in the rare occurance where the behaviour change that would have occurred on the "no bail-out scenario" is adopted by those who have been "bailed out". The "phew.. that was close .. i almost died there. I wont do that again."
But with banks and corporates the executives have had the free upside option for years... its not personal.... problems can be blamed on a multitude of things ..... you are not going to see this.