Tuesday, January 29, 2013

Banks are the Holy Churches of the Modern Economy?

Iceland's President, Olafur Ragnar Grimmson said in an interview with Al Jazeera's reporter on why Iceland survived where Europe has failed:
"... We didn't follow the traditional prevailing orthodoxies the Western world in the last 30 years. We introduced currency controls, we let the banks fail, we provided support for the poor, we didn’t introduce austerity measures as you’re seeing here in Europe..."

When asked if the Iceland's policy of letting the banks fail would work in the rest of Europe, he answered :
"… Why do they consider the banks to be the holy churches of the modern economy? Why are private banks not like airlines and tele-communication companies allowed to go bankrupt if they have conducted in an irresponsible way? The theory that you have to bail-out banks is a theory about bankers enjoying for their own profit their success, and letting ordinary people bear their failure through taxes and austerity. 
People in enlightened democracies are not going to accept that in the long run."

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