Will UK Nationalize Banks?
How about the USA for that matter? Nationalization, which happens when the government takes over, is a hot topic as the banking crisis evolves. Last weekend, the UK announced additional rescue plans. They’ll guarantee toxic assets in return for a fee and a promise to lend. That last part – the promise to lend – has been one of the most criticized aspects of the US bank bailout. Banks have taken huge cash injections, but they’ve been slow to lend to consumers and businesses. Some argue that the banks have already effectively been nationalized in the USA and elsewhere. Governments have given a signal that the banking system and large institutions can’t fail. The UK has a 43% interest in Lloyds so far, and 70% in RBS. Further reading: • RBS Will Be Guinea Pig for Creeping Nationalization • Mortgage Crisis Causes •
