Thursday, September 25, 2008

New Bank of the United States

What if we took our 700 billion and created a new Bank of the United states, backed by the federal government that offered a baseline of financial services at reasonable, but less than exceptional prices. It could be most cheaply based online. If the economy was good few would use it, but it would serve as a backstop in times such as those we face now. As far as the junk "assets, " this bank would be able, if the price was to its advantage, to purchase those, disassemble them and resell or restructure them with the original buyer. If financial institutions fail, the government could seize any remaining assets and deposit them in this bank. The current 700 billion dollar plan runs the grave risk of creating huge ghettos of foreclosed neighborhoods that may never be able to return to their previous vitality.

Interesting Plan... But...
By Economan Sep 25th 2008 at 1:56 pm EDT (Updated Sep 25th 2008 at 1:56 pm EDT)

That is an interesting idea, but, unfortunately, there is a catch. By creating a new bank, new staff would need to be hired, and a completely new infrastructure would need to be created. This would prevent a rapid acquisition of the assets.Much as the current plan is flawed, the $700 billion has to go to the existing banks, using their current infrastructure to administer the assets. This also allows their employees to keep their current jobs. The job losses at these major banks would actually hurt the economy a lot more.
Re: Interesting Plan... But...
By Frederick from Evanston, IL Sep 29th 2008 at 12:03 pm EDT (Updated Sep 29th 2008 at 12:03 pm EDT)

By making the bank on-line only and using the esisting resources of the teasury and IRS I would hope to avoid large infrastructure expenditures.

A once in a lifetime chance for reform
By Peter Rutherford Sep 25th 2008 at 2:10 pm EDT (Updated Sep 25th 2008 at 2:10 pm EDT)

Possibly never again in our liefetimes will we get a chance to negotiate with the International banking system for thorough root and branch reform. We must not lose this opportunity. The bail out must come with demands to get the World's banking system into proper order so that it works for people.
Re: A once in a lifetime chance for reform
By Frederick from Evanston, IL Sep 29th 2008 at 12:08 pm EDT (Updated Sep 29th 2008 at 12:08 pm EDT)

I hope you are right about this and positive changes occur. The Idea of the new US Bank might seem unneccessary then, it would certainly be little used under a healthy private financial system. However it would still serve as an alternative, safety-net for savings, checking, credit card and loan services.

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