Aerar

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Why saving banks?

10 January, 2009 (15:38) | economy, finance | By: Aerar

Seemingly the 500 billion rescue plan of the German government (german) for banks did not yet have the expected success (german). The banks might seem to be saved to some degree now (if they actually wanted to be saved at all) (german). But the fundamental goal of revitalizing the credit market has not been reached. So the first news of insolvences (german) of companies (german) reach us. The rescue plan of the government for saving the real economy on the other hand is very small compared to the bank plan. A heightening of this is confronted with resistance (german).

But why the irritating way to save the banks, which obviously are not willing or able to do their macroeconomic job of providing financings? Which lost focus of the interest of the real economy by concentrating on internal finance businesses. Nobody needs global casino players and there is no sense in saving them.

It would have been better if a public bank would directly have financed the companies. With a stock of 500 billions this should have been no problem at all. The conditions of this bank could have been set at a level, which allows companies a fair deal while on the other hand beeing high enough to leave room for better offers of private banks, in case they are still interested in credit business.

The rescue plan for banks of the government was not only halfhearted but inconsequent and a big mistake as it did not solve any of the basic structural problems.

Comments

Comment from Aerar
Time February 5, 2009 at 11:00 pm

Another reason against governmental money for private banks: http://www.spiegel.de/wirtschaft/0,1518,605335,00.html#ref=rss (german)