Not yet. And probably unlikely in the forseeable future. But the recapitalization of banks seems to be the right move. Will the banks pay dividends? And what happens in the case of capital gains by the government? Will it pay income tax to the IRS? Trivial but pertinent in some ways. $250 billion is not chump change.
How do we know we will not see anybody else fail? And what time frame do we give banks to fix their incentive systems, one of the root causes of this problem. And where deos this leave the VaR formulae and calculations? I wonder? During my work with IBBM, the banks in Malaysia said credit risk has been beaten to death, particularly the foreign ones. Guess who is having the last laugh?
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