Sealing Their Fate

Of all the proposals to strengthen up the financial system, the most innovative to date is this: outsource the bank rescue to the U.S. Navy.
Think of the advantages: efficient execution, elimination of moral hazard, and a disincentive for copycat transactions.

Oh sure, there’d be some increase in bail out activity, but that’s just a short-term problem. Once the banks are shored-up, there’d be little difficulty in getting them back afloat.

With Seals as regulators, you could relax knowing that your deposits are safe. In fact, the FDIC’s slogan could be changed from “Safe and Sound” to “Bring it on!” And reviewing loan workouts with Navy personnel would reduce delinquencies and improve transparency.

There’s little risk that overpaid executives would take their bonuses and swim. As they say in Coronado: “You can run, but you can’t hide.” Executive bonus recapture would not be a problem. And there would be other savings as well: it’s been noted that Navy Seals can get anyone to speak English in minutes. You can lead a horse to water, but the Seals can make him drink.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2017-07-17T12:35:23+00:00 April 14th, 2009|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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