HawthorneVillager.com

Italy is already at the centre.

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I Fell Into A Burning Ring Of Fire
I Went Down, Down, Down And The Flames Went Higher
And It Burns, Burns, Burns
The Ring Of Fire, The Ring Of Fire!

The solution for Italy is the same as it is for Greece.

Those banks that were silly enough to lend money to those countries should fail and be nationalized. The government (France/Germany in this case) can then bail them out appropriately and then sell their 100% equity stake to reclaim some of the costs of the bailout.

The current plan is for taxpayers to bail out the banks, while the equity holders just take a small hit. When bad decisions are made, the shareholders should be the ones taking the brunt of the pain at the end of the day.

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omnia dicta fortiori, si dicta Latina

If we simply refuse to bail out the bank's shareholders, then why exactly is there a big problem? I could be wrong, but I thought that most banks were worth more than their bailout packages.

Remember, the bailout of Greece is really just a disguised bailout of the banks. If I was Greek, I would be livid at the idea of taking hits to save some banks.

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omnia dicta fortiori, si dicta Latina

It grinds on my last nerve when I think of people going into banks, near losing everything, asking for a loan and being denied. But when the banks are in trouble those very people have to bail them out. Personally that's criminal that they use tax payers money. Like Zee said it should be regulated so it can't fail or doesn't ever need taxpayers money.

Why in the world would I care if a bank goes under? Good riddance.

People say insurance companies are the worst. Banks by far, far, far the worst. They charge you to "hold" your money while they invest it and make money off it. Gimme a break.

_________________
I Fell Into A Burning Ring Of Fire
I Went Down, Down, Down And The Flames Went Higher
And It Burns, Burns, Burns
The Ring Of Fire, The Ring Of Fire!

Unfortunately, we can only vent out our frustrations but the big to fail gamblers donot bother to fix their self created issues.

They have to realize that they cannot bring back the confidence through austerity/bailout plans- period

No capitalism, no bailouts/austerity neither China or any other country can bring us back to normal except we restore humanity (in shape of discipline and regulations). Untill then every day we will be floating between the fear zone and hope zone

Whatttt?

The banks are the ones taking a hit in order to prevent Greece from going bankrupt. They have agreed to give up 50% of Greek debt they hold, in order to prevent Greece from going bankrupt. If Greece goes bankrupt, there goes whatever is left of their precious welfare state, and they lose membership in the euro. Greeks quality of life will drop dramatically if the country goes bankrupt. Let's keep in mind the Greek government did this to their own country with drunken spending and creating an unsustainable system that no one was prepared to fix.

The Greeks are unbelievably lucky how much effort has been put into saving their essentially bankrupt country. The ones who should be livid are the Germans who have committed huge amounts of money to bailing out the the Greeks.

Because the failure of one large bank will have a domino effect. See Lehman Brothers. If it was that simple for one bank to fail and that's the end of it then sure, but too many of these institutions are tied and hold each others debt, and the failure of one major player in the system can drag others down. Not to mention the tightening of available credit in the system which will drag down the economy. See 2008 Credit Crisis.

Now someone is going to say that it shouldn't be possible for one bank to be able to bring down others, and have such an impact on the economy, and that greater regulation is required. I agree, however, this is the current reality that we have to deal with. Next steps should be to better regulate the financial industry, and as Zeeshan has suggested, limiting their reach as banks have become too powerful. No private company should be "too big to fail".

Did anyone notice how none of the Canadian banks failed?

Its because historically in Canada bank have been allowed to fail if they screw up.

Everyone needs to live with the consequences of their actions.

Having said that, banks in the US were forced by government legislation to give sub prime loans (bad or risky loans).