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Tobotron's avatar

What would be bad for the consumer if your countries banks were nationalised?

Asked by Tobotron (1313points) April 28th, 2010

some institutions around the world were nationalised as a result of the banking crisis and of those I know of in the UK, there actually doing better than a lot of the private banks in terms of returning to profitability.

what’s the big problem with nationalising high risk institutions such as banks and public transport in a move away from casino banking?

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7 Answers

Dr_Lawrence's avatar

There is much about the banking and financial industries that causes consumers concern. Having the option to choose which bank or credit union with which to do business is a big benefit. Nationalizing the industry means you have only one bank to choose. If it is well run, the consumer might be fine, if not, what can they do?

I do not know why you mentioned nationalizing public transport, but the lack of competition is not the key to maximizing customer satisfaction.

majorrich's avatar

Wow, in the US banks are pretty bureaucratic! Involve the Federal boys and watch it skyrocket! On the other hand, we already own banks we have bailed out. might experiment with them to see how they work out.

gorillapaws's avatar

Banks are run in order to generate a profit. Government institutions are run to maximize the service they can provide to the people for the cost, similar to a non-profit. I think private banks that are well-regulated provide the best model for how that industry ought to be run.

Zaku's avatar

Why would nationalization need to be all or none?

jerv's avatar

@gorillapaws So basically the US can never have a good banking model, eh?

gorillapaws's avatar

@jerv I think some things work better when run for profit than others. Schools, Military, Police, Fire, Healthcare all work better when Government run. Other industries work better when the market has its way (so long as there is oversight to prevent abuse); I would include banks, manufacturing, software, etc. in this second group.

jerv's avatar

@gorillapaws “I think private banks that are well-regulated provide the best model for how that industry ought to be run”

My point was that they do not do a good job of self-regulation yet even contemplating the possibility of thinking about nationalizing banks (or any other business), or even having any degree of oversight, is considered worse than pedophilia these days. Sorry for the misunderstanding.

In theory, our system never even could have gotten to be what it is today if they followed the laws/rules/regulations on the books or those things were actually enforced. Our current problems are not the result of too few rules though, so don’t think that we need much in the way of new rules; we just need to enforce the current ones.

That said, I belong to a credit union :P

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