Will it work? Obviously it will take time to tell whether the Treasury Secretary Tim Geithner’s more detailed plan to save the banks will work. Many questions remain, among them, according to Martin Wolf in his March 24 column in the Financial Times, whether the “vulture fund relief scheme,” will “get in the way of the necessary recapitalization” of insolvent banks. For details of the Public Private Partnership Investment Program with links to white papers and more, click here.
Meanwhile Nouriel Roubini, Professor of Economics at the Stern School of Business at NYU calls for a “special insolvency regime” for “bank holding companies and non bank financial institutions,” that are critical to the financial system. Roubini writes in his economics blog, RGE Monitor, that a “new conservatorship/receivership regime of insolvency could be similar to the one used to manage the orderly takeover of Fannie and Freddie.”
Lessons from 1907? Jean Strouse looks to another U.S. panic, in 1907, where “decisive action” was the order of the day, in her Op-Ed in The New York Times on March 22: “When Reality Really Did ‘Fall Off a Cliff’”