SHOOT: Soros of course is spot on here. If an engine is broken you need to get a new engine (or risk losing all your new investments on your already broken engine). Of course not everyone agrees that the engine of international investment banks is broken (which is abundantly clear looking at the comments made here). I guess we will find out whether what we want to believe is true, or whether another reality exists that may be quite painful to accept.
Essentially, Soros believes we should be following the so-called Swedish solution but fears we are heading down the same policy path as Japan. "We're effectively keeping zombie banks alive," he says.
To those who rail about the dangers of nationalizing banks, Soros says: "You have to recapitalize the banks for them to function. As it is, we are nationalizing the debt of the banks, but not the banks themselves."
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