Central banks could have acted on the Bank Crisis (faster)

Although some say the bank crisis is nearing its end, Nouriel Roubini, one of the few economists who foretold much of the current financial turmoil, is expecting that we are only half-way.

It is surprising to see how slow governments are responding, and how unprepared they are. Some thoughts are good. Some are very bad or rigid. The last resort, nationalizing a bank, is a step that is taken too fast, resulting in big borrowing by governments. A simple alternative, central banks are taking over bad loans and providing the needed cash in exchange for obligations, would have left system banks intact in return for higher total interest sums. If central banks would have acted faster - hopefully next time the scenarios are better prepared - the gruntling distrust would not have expanded as it had done, and the financial climate would still be better.

Also the Fortis drama could have been prevented: the bank could still be intact, although a big part of its undervalued assets would be temporarily bought by related central banks. Selling a bank in parts in the midst of a crisis, never results in a good sales price. This results in loss of trust of shareholders, colleague banks, and clients. Actually, also the reputation of involved governments are damaged as the national debts of Belgium and The Netherlands were increasing significantly because of the bail-out.