All financial institutions to be run by the federal government.

[NJ5]

famousringo said:

NJ5 said:
@TheRealMafoo: I'm just gonna assume you are correct as far as this reply goes:

Aren't these financial institutions now largely owned by the taxpayers? Once you get bailed out, you become someone else's bitch... If banks don't want to get strong-armed, next time they should take better care of their business instead of running it into the ground in the knowledge that they will become someone else's problem.

As I understand it, a lot of the (surviving) banks are paying back the bailout money quickly, precisely because they don't want to be subject to some of the strings attached to that money, such as limits on executive compensation. To many of them, I think the bailout money was just a lifeline they could grab to avoid being swept away while the bottom fell out of the market. Now that the money is there, and investors aren't panic-selling anymore, a lot of banks are free to make other adjustments to deal with their bad books.

These regulatory powers are something different. They apply to a bank whether it's taking bailout money or not. But I wouldn't look at them as a system for punishing banks for bad management, more as a system for preventing bad management which, while it may be extremely profitable in the short term, can lead to collapse in the long term.

That's what I meant. If banks are big enough to cause lots of trouble in the economy, and very badly managed, they're just asking to lose control of their operations (or go out of business in a messy way, which most governments wouldn't allow).