Saturday, January 22, 2011

Money for something

Faced with new, tougher European stress tests and international concerns over their exposure to the property bust, Spain’s savings banks, or cajas, are very likely to soon be partially nationalised.

A very good idea to get what is actually public money back in public hands, but the decision to do this would only be a fair one if Spain’s larger commercial banks were also dealt with in the same way.

2 comments:

CIngram said...

Thanks for dropping by my place earlier.

I'm not sure why you imagine the assets of the Cajas are public money. It most certainly isn't; it belongs to the depositors (ie possibly you and certainly me) and if the government starts to treat them as another piggybank we may be in trouble.

The structure and legal entity of the Cajas is, as I'm sure you know, quite different from that of the banks, so there isn't really a comparison or a need to be 'fair'. And anyway nationalising banks is an extremely bad idea for a number of reasons. One of the things that kept Labour out of power for 18 years was that they had such a policy and people knew it was bonkers.

Brett Hetherington said...

Thanks for the comment. What I meant by public money was that the banking system here (like other countiries, though to a lesser degree) relies on money from the public: ordinary workers and businesspeople.

I agree that bank nationalisation was an unpopular policy bur it's time has now come because taxpayers across Europe, the UK and the USA are ALREADY funding a great deal of bank finances after the huge crisis of the last few years so to be fair and equitable, cajas and all banks should be in public control for that reason alone.

The "market" can be trusted even less than public officials.