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CBN Rolls Back Reforms -Universal Banking To Be Phased Out 2011 - Business (5) - Nairaland

Nairaland Forum / Nairaland / General / Business / CBN Rolls Back Reforms -Universal Banking To Be Phased Out 2011 (10173 Views)

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Re: CBN Rolls Back Reforms -Universal Banking To Be Phased Out 2011 by biina: 3:01am On Mar 20, 2010
The issue is not about whether you bail out banks or not, but rather selectively bailing out banks with public funds under the guise of being 'systemically important' with no objective guidelines to determine who qualifies as being "systemically important". Such categorization being made on a case by case basis  by a handful of people is why I said it is an uneven standards.

An older example of selective treatment was the case of LTCM and Meriwether. Just a year after mismanaging funds (about $4.6 billion in losses) at LTCM and being bailed out under 'Systemic importance', Meriwether was back in business in 1999 with JWM and had access to $3bn by 2007, but guess what, he lost everything again in 2008. Shouldn't he have been banned after the first debacle? but instead they let him have a second crack at losing investors money. Now here is the clincher, he has reopened a third investment firm called JM Advisors Management, and is doing the same thing over again. angry

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