Quote:
Originally Posted by kingstu
I agree...I just don't see how borrowing another $700BN will have any impact on that.
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It's aimed at allowing banks to remove toxic loans from their balance sheets. The government will then sit on the loans and help to work them out. It's effectively a second life for many banks. Surely, the weaker banks that made bad decisions should be punished but in a fractional banking system, only so many banks can collapse before we hit a point of no return (IMHO).
Also Stu - isn't it the interbank lending that's the real issue? Some companies simply can't roll their paper into the market place because there are no buyers.