Healthy Banks should get the bailout??

United States
November 21, 2008 3:44pm CST
Here's something new I'm just hearing right now. The head of Patriot Bank thinks the bailout money should be allowed for the healthy banks too, not just to shore up the failing banks. He's saying that it's wise to give the healthy banks some of the money because they are in a better position to start lending, and stimulate the economy. I don't know too much about the banks and all the economic stuff, but I think he makes a lot of sense. We're already seeing that the failing banks are just using it to keep themselves alive, not to stimulate economy. He's saying they really can't because they are in a failing position, but a bank like his CAN because they are healthy and doing fine and can put that money to proper use in stimulating the economy, injecting money into the economy and giving loans. He says the idea Paulson has is a good one, but won't help enough unless they include healthy banks in the plan. It sounds crazy at first, but I'm thinking it might make a lot of sense, especially considering that banks that are healthy and functioning well in this setting we're in now, must know what they're doing and also must NOT be involved in all the fraudulent activities the failing banks were involved in, so maybe they would be more trustworthy in this process. What does everyone think?
1 person likes this
5 responses
@irisheyes (4370)
• United States
23 Nov 08
I agree. There are a number of little retail banks that are in no danger of collapsing and I think it would be a good idea to give them the money and let them put it on the street. Since they are not in need of financing, they could receive a standard commission for lendidng buyout money. There seems to be some feeling that only the big guys (practically all of which are in trouble) can get money out there. The problem is that they are not putting the money out there. Look at what Citibank just did. They were so anxious to buy Wachovia that it went to court. Now they are teetering and need help. If they didn't use every available penny to try to get bigger, they might not be in trouble. These big boys are all investment banks and they are all in trouble. All they understand is greed and a chance to gooble up their compettion. When we still had the Roosevelt banking act in place, banking was separated and only small, safe, conservative retail banks could receive FDIC insurance. Now they are allowing mixed banking but there are still many small, solid banks in America that did not invest in subprime real estate and they could help with this mess.
@xParanoiax (6987)
• United States
22 Nov 08
It'd probably be smarter but also even more controversial. Also, the money'd have to be relocated from some other projects to be any good (since they're just printing and borrowing most of that bailout money which contributes to our debt and inflation problems). Actually, it'd probably be smarter to let the failed banks go bankrupt then to puff up the healthy banks to encourage them to soothe the problem. I can't support anything that involves encouraging our debt and inflation problems, mind. All I know is what's smart and what's stupid, even if it's still...well crap imo.
• United States
21 Nov 08
I like to think I know something about economics, but I would have to do a lot of research before I could answer this one. Off hand, I'd say it is a bad idea in that it could lead good banks to devolop bad habits.
@Destiny007 (5805)
• United States
22 Nov 08
I think the taxpayers should not be subsidizing any bank or business at all. That is nothing less than unadulterated socialism. Why should the taxpayers be responsible for the survival of any business?
@pijul83 (42)
• Malaysia
22 Nov 08
it don't think those healthy banks should get bailouts too....