They have convinced many that bank failures of the big corporate bank giants will cause the downfall of the nation.
normbc9, like it or not that is indeed the truth. The capitalistic system is designed in such a way that financial institutions are the every foundation of the economy in any country, including Canada.
In Canada we are fortunate in having efficient, well managed banks. In these financially hard times, our banks are paying a very healthy dividend (7 to 9 %) and none of them are talking of reducing the dividend. So Canada is in a relatively fortunate position.
US however, is in deep trouble, largely because of its unregulated banks (banks are much more tightly regulated in Canada). Especially during Republican rule, deregulation ran amok. Republicans let banks to practically anything they wished including sub prime ending.
Now they are reaping the harvest. Economy depends upon the financial institutions and financial institutions are in trouble. Like it or not, they have to rescue the banks if they donít want to go into a long term depression, with unemployment reaching 25% (as it did during the last depression).
I say that is all hype and look at what happens when smaller banks fail.
Smaller banks do not have any significant effect on the economy. Failure of big banks could very well cripple the economy.
So they have to rescue the banks. But at the same time, there has to be regulation, there should be legislation in place to see to it that banks do not abuse their power. I donít know if they are doing that. Failing that, all the bailout may prove to be useless.