FionaK |
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| One of the things I have been told is that the banks cannot be allowed to fail because if they did that would lead to starvation very quickly. The argument is that nothing could be paid and the ATM's would be empty and it would generally be disastrous. That has never made any sense to me because the money would still be there; the buildings would still be there; the staff would still be there. There is no reason at all for the problem asserted to arise, so far as I can see, and I have never had a satisfactory answer to my question about this. It is another of those assertions which have surface plausibility, if you happen to be asleep. That is all it has, I think
I have been confirmed in this conclusion by observing Iceland, which did indeed let its banks collapse and where no such consequences ensued. Today I read the judgement in the case brought against Iceland by ESA (see Iceland thread) and this impression was reinforced. What struck me was the time line which was included in that judgement.
On the 6th of October the Icelandic parliament adopted emergency powers which included power to create new banks.
Landsbanki collapsed on the 7th of October 2008. The same day the Icelandic financial services authority (FME) took control of a shareholders meeting and suspended the board of directors. They appointed a winding up committee which assumed the full authority of the board, with immediate effect.
Between the 6th and 9th of October FME established new banks.
Between 9th and 22nd of October domestic deposits in Landsbanki were transferred to the new bank, under the emergency powers
That is precisely what I thought could be done: and it was done. There is no argument in defence of bail outs on grounds of civil collapse. Another big fat lie from our plutocrats, so far as I can see
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