Opinion From A Well Run Bank

[jeffrey]

Not all banks are in a financial mess. Some didn't take on the high risks and are still quite sound. Here is an opinion from one of those banks about the bailout (pdf format)

http://media.gatewaync.com/wsj/pdfs/2008/09/allison.pdf

[boosami]

What a well-written and concise letter. We shouldn't reward and enable the institutions that caused this economic downturn while punishing those organizations that are financially well-run.

[dossin1]

I really don't understand this whole mess. Is the bail out bill a last ditch effort to try and save the investment banking industry? My understanding is that GS and MS were the primary issuers of this bad paper and the bad paper was purchased by banks and others all over the world. Now banks everywhere are refusing to lend or making it difficult to borrow, even though the Central Banks are dumping all this money into the market. This is why there is all this talk of a world wide financial collapse. If we could solve this mess with the $700B bailout, maybe it would be cheaper in the long run. If we could get this bad paper out of the system and then place regulations on the creation of these "exotic" financial instruments, could it buy us some breathing room? I just don't know.

[disgruntable]

That's exactly the reason we should let the market solve the "crisis". Well run institutions have money laying around to buy up assets (BoA and countrywide, Chase and Wamu, etc). This isn't a crisis affecting financial institutions, this is a crisis affecting poorly run financial institutions.

If the assets we're helping to prop up have any value at all, the well run institutions will buy them at the right market price. If the assets truly are worthless, why are American taxpayers being forced to invest in them? This whole bailout is disgusting.