Joseph Stiglitz on Bank Nationalization

At a recent community forum on the economy, Nobel Prize Laureate Joseph Stiglitz covered a wide range of topics including, the stimulus package, the restructuring of financial institutions, bankruptcy reform, the housing crisis, TARP 1 failure..etc. He also touched on the subject of bank nationalization, arguing in favor of it. According to Professor Stigliz “temporary bank nationalization is not that big of a deal”. He thinks it is essential for the sector to impose certain  regulations and change its incentives structures which encourages excessive risk-taking and short-sighted behavior. But once these changes take place, and when the economy recovers, “you privatize again”, he said.

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