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The New DU. Reply #12: So theoretically, the government should not have let GS and MS become banks and let them fail
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FarCenter
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Sun Apr-25-10 11:05 AM
Response to Reply #9 |
| 12. So theoretically, the government should not have let GS and MS become banks and let them fail |
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But that would have collapsed the financial system.
Only about 40% of the financial system is in the commercial banks. About 60% of the financial system is non-bank financial institutions. They are the problem that needs to be addressed, not the banks.
The only banks that got into trouble were the ones that had merged with large thrifts -- Bank of America with the thrift Countrywide, and Wachovia with the thrift Golden West. The bad mortgages in the thrifts nearly collapsed BofA and caused Wachovia to be rescued by Wells Fargo.
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