After the massive bailout of Citigroup on Sunday, I was left wondering why the banking sector has so far not bounced back and started lending again with all this taxpayer money at its feet. Robert Peston (who, by the way, has become a journalistic superstar in the UK since the Northern Rock bailout) drops a hint:
Against that backdrop, the question is whether it is remotely sensible to put a deadline - implicitly or explicitly - on the repayment of all that taxpayer funding for banks.
But if we don't demand our money back, we'd be formalising that there's been a semi-permanent nationalisation of the entire banking system.
And that would massively encroach on the ability of our banks to operate as independent commercial entities.
There would be massive political pressure on them to become quasi-social utilities, providing loans at the behest of ministers and officials rather than on the basis of commercial criteria.
So here's what may turn out to be the choice: less lending for years or public ownership of the banks for the foreseeable future. It's not an easy choice, is it?
Read the whole entry; it is a true tour de force. Or a good sample of, as Alastair Campbell once put it, "the Peston School of smartarse journalism". Peston can afford to be a smartarse these days.
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