Friday, October 3, 2008

Senior economist cuts through the cr&p!

More and different - including a debt-for-equity swap for the financial sector

William Buiter, professor at LSE etc etc talks complete sense. The solution is neither to allow banks to fail nor to nationalise them, or in the case of B&B or NR the worst of both worlds - nationalise them and THEN allow them to fail. The solution is for banks to cancel a proportion of the bonds that banks have issued and give the bondholders new shares instead. I have been trying to explain this for ages, to little avail. At least I am not alone.

Posted by mark wadsworth @ 02:08 PM (437 views)
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