Rescue Coming For Failed Banks?
Sadly, at least for banks that have already failed, there is little that can be done to save them. Those that still retain some liquidity are the only ones that gain from Fed intervention.
Mish blogs:
The question at hand is: Can the Fed provide capital to GSEs or failed banks? Anyone who thinks so is wrong.
The Fed can only provide liquidity, not capital, to failing institutions. That is not only my opinion, that is the opinion of the Fed as well. Let’s start by taking a look at Fannie Mae (FNM) and Freddie Mac (FRE) and continuing further with a close look at liquidity itself.
Whether or not banks will manage to get out of debt with the latest Fed intervention depends on bank management.
January 7, 2008 | Filed Under Get Out of Debt
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