{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Nationalization of Banks

Nationalization of Banks - Nationalization of the Banks Pro...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Nationalization of the Banks Pro: The Surest Way to Recover by Thomas S. Mondschean, DePaul University When a bank fails, the FDIC has three options: closure and liquidation, merger with a healthy bank, or nationalization. Most failures are resolved using the merger option, but for very large banks, nationalization for a temporary period may be the best choice for taxpayers. In 1984, Continental Illinois Bank, then the seventh-largest bank in the U.S., failed. The FDIC decided to nationalize it. It wiped out existing shareholders, infused capital, took over bad assets, replaced senior management, and owned the bank for about a decade. The management ran the bank like a commercial enterprise, not a government agency. In 1994, it was sold to a bank that is now part of Bank of America ( BAC ). Nationalization does not mean socialization. It means the government will manage the bank as a commercial entity, with the intention of selling it back into the private sector. This approach means that the
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.
  • Spring '11
  • Mcdounough
  • Federal government of the United States, Federal Deposit Insurance Corporation, Nationalization, Continental Illinois Bank, poorly run banks

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern