Bail out foriegn banks? You’re kidding, right?

In today’s New York Times I read “Foreign Nations Pledge Support, but Not Financing” with some interest.

I especially liked the following quote:

“There’s a view in Europe that this is a U.S.-made problem, and that it should be solved in the U.S.,” said Charles H. Dallara, the managing director of the Institute for International Finance, a group of more than 300 global banks.

And this one too:

“We need to assure that disadvantages for foreign institutions do not arise from the U.S. program,” Manfred Weber, the general manager of the association, said. “It was, after all, American products that created the crisis and that created the contagion effects.”

This problem started in America, but it wasn’t made here.  As far as I can tell, no one put a gun to the heads of European bankers and told them buy this junk or else.  Those folks were just as greedy as the American bankers and investors that bought securities with unknown risks and unknown valuation.

And it looks like extending the bailout wouldn’t help much anyway – the Wall Street Journal, in the article “Bailout Won’t Help Europe Banks Much,” claims that some foreign banks would rather keep the sour investments on their books rather than take a write down on the value, and this bailout wouldn’t help with bad mortgages in the UK and Spain;  yes, the UK and Spain both went on a mortgage lending spree, leaving millions with homes in danger of their form of bankruptcy protection.

We should fix our problems here, and leave the issue of foreign-owned securities up to the foriegn owners of those securities; there’s no way we should apply US taxpayer dollars to help foreign banks get out of the financial situation they joined willingly.

I think they’re just embarrassed that they were taken as badly as the bankers in the US….


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