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Then I suggest they shouldn't underwrite them.
My main point is that should banks fail if we as a state are the underwriters we should take all the assets from the previous owners (shareholders)
Grumpy_Git-
Then I suggest they shouldn't underwrite them.
Yeah, they shouldn’t. They certainly don’t want to. In 2008 we are told the alternative was worse.
If a significant bank fails there are no liquid or semi liquid assets, at all. None. A failed bank’s liabilities always outstrip its assets, thanks to gearing.
Any existing shares were pretty much valueless at the point where the bank is prevented from failing, so what you are suggesting mostly happens anyway, except the state takes on only liabilities.
Howard
The state doesn't / shouldn't want to get in to Retail banking.