Friday, 3 April 2009

More on the American bank plan to get rid of toxic assets

For anyone interested, the debate still rumbles on. Here is a summary of the different sides, and here is Krugman's response. The gist of what he says is that the plan, to allow the toxic assets to be bought up with most funding coming from the government, by driving prices of these assets up, will benefit not only those banks who are in trouble, but also many others, so it is basically a waste of a lot of money. He favours a much more targeted approach. This is a well argued counter view by a fund manager.

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