Tim Reucroft
01-26-2009, 10:59 AM
The UK government wants to inject 600 billion GBP into the banking system.
The wholesale banking industry has been dying for years as banks are disintermediated. Why throw good money after bad? Is there a better option?
The secondary exchange markets are clearly not working - there is no price discovery going on, the only indicator currently working is fear.
This leaves just one avenue left - private equity. If the UK government were to inject 600 billion GBP into the UK economy via private equity the economy would grow so rapidly they couldn't count the tax revenues quick enough. Why bother forcing the banks to recycle the 600 billion GBP into the economy when you can do it directly? Wholesale banking is finished, follow through the logic and kill it off - replacing it with private equity.
The wholesale banking industry has been dying for years as banks are disintermediated. Why throw good money after bad? Is there a better option?
The secondary exchange markets are clearly not working - there is no price discovery going on, the only indicator currently working is fear.
This leaves just one avenue left - private equity. If the UK government were to inject 600 billion GBP into the UK economy via private equity the economy would grow so rapidly they couldn't count the tax revenues quick enough. Why bother forcing the banks to recycle the 600 billion GBP into the economy when you can do it directly? Wholesale banking is finished, follow through the logic and kill it off - replacing it with private equity.