A Quote by Nouriel Roubini
You have to eventually nationalize US banks, you have to take the problem by the horns. In my view actually most of the US banking system is insolvent.
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In the U.S. more than any other place, the banking system is insane. Millions of Americans lost their houses. Because of what? Because of the banking system. This American banking system is also coming to Europe. We can say today that the banks and high financiers run the world.
They [political leaders ] thought the only problem was the banking system, and if they fixed the banking system, all would be fine. But the banking system and the mortgage problem were symptomatic of some deeper problems, and evidently they still haven't recognized those deeper problems.
Repeal the entire Banking Act of 1933, and Austrian School economists will cheer, especially if the current system were replaced by a 100%-reserve competitive banking with no central bank. That banking reform would give us a sound money system, meaning no more business cycle, bailouts, or inflation.
The fundamental problem with banks is what it's always been: they're in the business of banking, and banking, whether plain vanilla or incredibly sophisticated, is inherently risky.
In our election manifesto is: we keep the right to create money and to bring in circulation, for the cause of the government ... Those who do not share this view, reply us to the issue of paper money is for the banks, the government should stay out of the banking business. I agree with Jefferson's opinion ... and just like him I say again: the issue of money is a matter for the government and the banks should stay out of government activity.
I suggested a compromise to give the banks a year's time and see if they succeed in showing us that nationalization wasn't necessary. The year went by and we realized it hadn't done any good, that the money still ended up in the hands of the rich industrialists or friends of the bankers. So I concluded that it was necessary to nationalize the banks. And we did. Without considering it a socialist gesture or an antisocialist gesture, just a necessary one. Anyone who nationalizes only so as to be considered on the left to me is a fool.
We survived for hundreds of years under the old banking structure. You'd have clearing banks, then merchant banks doing the racy stuff, and then building societies where you'd join a waiting list for a mortgage. But then banks started buying stockbrokers, doing mortgages, and you ended up with these big banking groups doing everything.
Technologists come at a problem from the point of view that the system is working a certain way, and if I engage in that system and actually change the rules of the system, I can make it work a different way.
Among the largest banks, the capital ratios remain good and I don’t expect any serious problems . . . . among the large, internationally active banks that make up a very substantial part of our banking system.
The Cyprus Financial Crisis was a devastating blow to Cypriots and halted their banking system. Banks closed for two weeks to prevent a banking panic. When they reopened, capital controls were placed on the people's money, and customers were met by armed guards at the branches.
Instead of abandoning competition and giving banks protected monopolies once again, the public would be better served by making it easier to close banks when they get into trouble. Instead of making banking boring, let us make it a normal industry, susceptible to destruction in the face of creativity.
From my point of view, the American financial system - including banks and investment banks - is far safer because of capital and liquidity requirements. Despite all the turbulence so far this year, I don't think anyone's questioning our system. And that, obviously, is a good thing.
An asteroid could hit us at any moment. This is not - and also, the most successful kind of life on this planet is not us, it's microbes. They're the ones who greatly outnumber us, and may eventually destroy us.
And the banks - hard to believe in a time when we're facing a banking crisis that many of the banks created - are still the most powerful lobby on Capitol Hill. And they frankly own the place.
Italy spills over to everything. Italy is a huge banking system. It has been the major banking system in Eastern Europe. It's worked with Austria's banking system. There's all sorts of interplays there. So it's not the PIIGS one should worry about. Germany hasn't even begun falling yet. And when Germany falls, and it will, that's when the panic begins to set in.
To save the banks from making losses that would wipe out their net worth, you'll have to get rid of Social Security. It means that you'll essentially have to abolish government and turn it over to the banking system to run, with an idea that the role of governments is to extract income from the economy to pay to the bondholders and the banks.
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