The provocative, but always interesting Willem Buiter explains why, in his view, insuring toxic bank assets is throwing good taxpayer money after bad private money.
We have yet to face this problem in NZ, though perhaps Mascot may be our trial run.
As usual Buiter’s piece is well worth a look.
Like its American and Dutch counterparts, this toxic asset insurance scheme is without redeeming social value: it is inefficient, unfair and expensive to the tax payer. Apart from that it is great. There also are superior alternatives available: full nationalisation and, best of breed, the ‘good bank’ solution.
Not one for stinting in his comments.