Injecting capital (nationalising) into banks is all very well. However, there are two further steps that governments need to take:
1 Guarantee all deposits (deposits are the bedrock of the banking system, without a guarantee depositors will continue to withdraw their money)
2 Cut interest rates by at least another 1% in all major economies
Do the above and the run on banks will be halted, fail to do the above and the run will continue.
No comments:
Post a Comment