Soros – Governments Sould Break Up TBTF Banks
Legendary investor, philanthropist and the man that broke the Bank of England, George Soros has joined calls to break up the banks…
Soros has openly supported Obama’s idea of breaking up ‘too big to fail’ banks at the World Economic Forum in Davos.
The hedge fund guru has been making noises for some time about the fact that big banks were making huge profits off the back of state guarantees, bailout programmes and easy money policies. In Davos he said banks had made the mistake of treating these profits as if they had actually earned them themselves which in turn had created a political storm that would be difficult to contain.
This latest call underlines his stance that banks engaged in risk-taking activities should be in the same position as hedge funds; basically if they cock it up, they go under.
BBC: Both regulators and bankers had the “misconception” that markets are efficient, Mr Soros said, and had been blinded by their “ideology” of “market fundamentalism,” assuming that markets should always be lightly regulated.
Whenever a bubble burst, governments and regulators made the situation even worse by cutting interest rates and making money even cheaper – until the subprime mortgage bubble brought the whole system down, he said.
