“Nationalising RBS was a monumental error; no bank must ever bailed out again. Resolution and bail-in procedures to properly wind-down even the largest institution must be ready for use the next time there is a crisis. The government’s takeover of part of the banking industry in 2008 – combined with a stagnant economy and a flawed narrative about the real causes of the crisis – has triggered a cultural shift that will turn out to be disastrous for Western capitalism and prosperity.”
This is also very on point:
It is impossible to run a bank – especially one with a large investment bank unit – as part of the public sector. One can only do it for a very short period of time, as the US institutions found during the Tarp episode; they paid the money back very quickly to liberate themselves from the state’s shackles. Permanent state ownership means political considerations take over; and the pressure builds to pay bank employees like civil servants.
By the way, while I was relaxing after a nice weekend in the country last night, I watched the DVD of the Atlas Shrugged movie (it shows the first third of the story, or thereabouts). I quite liked the film, although it lacks that sparkle I like to see in a big topic like this. (The actress who played Dagny Taggart is good, as is the actor who plays Hank Rearden. The rest are so-so). But even so, one thing that grabbed me from the start was that this might have been a documentary about the financial problems of the West, rather than a piece of fiction.