First take a time-out to think about the purpose of our banks.
Sir Martin Wolf in his “It is time for comprehensive rescues of financial systems” October 8, seems to be responding to panic, with some panic. Better focused is John Kay when in “Public assistance must first protect the taxpayer” he tries to limit the panicky reactions reminding that “when governments intervene in the banking crisis, their objectives should be equally narrowly focused and on what matters to the public and not what matters to the banks.”
Wolf mentions that the finance ministers and the central bankers who will soon convene in Washington “must travel with only one task in mind: restoring confidence” I agree, though I must ask… confidence in what or whom? It is important for these leaders to take a brief time-out first in order to think about what the purpose of our banks should be. They have not done thought about it for the last couple of decades, ever since the bank regulators convinced them that the only important thing in life was that banks should not default.
As a foreigner in the USA I am truly amazed with how much societal importance is given to credit scores… as if that is what life is all about. Pushing credit down the throats of people, for instance with subprime mortgages, cannot and should not be priorities of banks, at least not those that merit taxpayer bail-outs when things go wrong.
Yes, availability of credit must urgently be restored… but given our limited resources is equally urgent to prioritize what most urgently needs and merits credit. Is putting a floor under real estate a priority? Perhaps, but surely only as long as that floor stand not in the way of young people searching for affordable housing solutions.
Wolf mentions that the finance ministers and the central bankers who will soon convene in Washington “must travel with only one task in mind: restoring confidence” I agree, though I must ask… confidence in what or whom? It is important for these leaders to take a brief time-out first in order to think about what the purpose of our banks should be. They have not done thought about it for the last couple of decades, ever since the bank regulators convinced them that the only important thing in life was that banks should not default.
As a foreigner in the USA I am truly amazed with how much societal importance is given to credit scores… as if that is what life is all about. Pushing credit down the throats of people, for instance with subprime mortgages, cannot and should not be priorities of banks, at least not those that merit taxpayer bail-outs when things go wrong.
Yes, availability of credit must urgently be restored… but given our limited resources is equally urgent to prioritize what most urgently needs and merits credit. Is putting a floor under real estate a priority? Perhaps, but surely only as long as that floor stand not in the way of young people searching for affordable housing solutions.
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