The Natural Philosopher wrote in
:
Paul Treadaway wrote:
The Natural Philosopher wrote in
:
The correct way to handle a Northern Rock would be to implement
insurance that all banks must pay to safeguard depositors deposits:
if that had been in place, Northern Rock could (and should) he gone
to the wall with scarcely a ripple. Fat cats, employees, and all.

That would just shift the risk onto insurance capacity providers, so
the government would be bailing out failing Lloyds syndicates etc.
rather than banks directly. And of course with insurance the banks
might have pushed the envelope of risk even more.
Lloyds names are not bailed out. Whatever happened to Hunt the Shunt?

They would be if they were all that stood between the banking system
collapsing and the banking system not collapsing.

Al right dont call it insurance, call it a liquidity fund that simply
backs te ebanks as a seconfd line of liquidity. The money paid as
premeiums accumulates and is what inures the customers against bank
losses.

Well the premiums would be passed on to the customers, so what
actually is the advantage over the government providing the liquidity
and then everyone paying for it in taxes? Unless it's happening every
year, it's hard to see that the market is going to be noticeably more
efficient at sporadic liquidity splurges.