Foreign Policy Blogs

An Informed Discussion of Bank 'Nationalization'

Charlie Rose interviews Fred Mishkin, Nouriel Roubini, et al.

This is a concise — but informed — discussion of where we are, and where we need to go as far as the current American banking and financial crisis. The interview by Charlie Rose of Fred Mishkin (Columbia University), Nouriel Roubini (NYU), Mark Zandi (Moody’s) and others gives an exceptionally clear perspective on the implications of ‘Nationalization’ — the equivalent of putting functionally insolvent large U.S. banks and financial institutions into receivership without having to pump additional taxpayer dollars into keeping “zombie” banks alive like Japan did during their “lost decade.” The question of functional insolvency, coincidentally, is the purpose of the Treasury Department’s “stress testing” of the capital ratio and balance sheets of these institutions. To make the “stress testing” hurdle by the Treasury Department, U.S. financial institutions are now resortng to accounting tricks by calling for the temporary halting of ‘mark to market’  in order to artificially inflate the value of their assets based on a speculated future value, as opposed to using actual current Market value. Wall Street argues that current value is not an accurate reflection of value. If that is conceded, then neither would future value assessments be any more accurate, in my view.



Elison Elliott

Elison Elliott , a native of Belize, is a professional investment advisor for the Global Wealth and Invesment Management division of a major worldwide financial services firm. His experience in the global financial markets span over 18 years in both the public and private sectors. Elison is a graduate, cum laude, of the City College of New York (CUNY), and completed his Masters-level course requirements in the International Finance & Banking (IFB) program at Columbia University (SIPA). Elison lives in the northern suburbs of New York City. He is an avid student of sovereign risk, global economics and market trends, and enjoys writing, aviation, outdoor adventure, International travel, cultural exploration and world affairs.

Areas of Focus:
Market Trends; International Finance; Global Trade; Economics