Argument: Bad managers are ousted at failing banks; nationalization unnecessary


Rick Newman. “Bank Nationalization: It’s No Panacea”. Seeking Alpha. February 23, 2009 – “Somebody would still have to run the banks. A key reason for the government to take over a bank would be to boot the existing management. That might sound satisfying, but it raises all sorts of troubling questions. Barth asks: ‘Who’s going to replace current management? Some assistant secretary of the Treasury? Does President Obama become chairman of the board? Would they run it like the U.S. Postal System? Would that instill more confidence in the banking sector, or less?’ Besides, many of the CEOs who caused the worst problems at firms like Citi, Merrill Lynch, Wachovia, Washington Mutual and Countrywide Financial are long gone. Most of the people now running those banks, or the remnants of them, are cleaning up problems left by others.”