dsula wrote:Yes, but banks (like any other business) try to maximize profits. So it then was actually the governments fault to allow banks to operate under such relaxed rules, which they fully exploited. Or was it the people's fault, for voting in a goverment that promised (and delivered) quick and cheap money?
The main fault of governments is the bank bailout strategy and other futile attempts to prevent banks from getting bankrupt.
Fault of banks was to recklessly issue loans to various groups of subprime customers, would that be a PIIGS states or American mortgage seeker applying for NINJA loan.
Fault of customers was to apply for loans despite of lack of credible strategy of repayment (speculation base on bubble economy doesn't count as such).
Liquidate insolvent customers including national assets of Greece, liquidate welfare state, liquidate insolvent individuals and liquidate insolvent banks.
That would lead to liquidation of 70% of first world economy or so but at least we would learn where we really stand.
Nothing short of that will really do and delaying inevitable with false hopes that incurred debts will simply go under the carpet will lead to liquidation of Western democratic system in due course.
Economic collapse is a Nature's proxy and financial engineering won't stop it.