One suggested out: Create new banks that wouldn’t be saddled with the soured loans and toxic assets constraining other lenders.
That’s easier said than done. Even with government funds, most start-ups couldn’t muster the technology, infrastructure and management expertise to form the kind of big, national bank that could quickly have an impact.
Most, that is, except for Wal-Mart Stores Inc.
The retailing giant could ...
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Jeopardizing the economy? This is a well connected article that puts an idea forward. That's supposed to be a bad thing? Say what you will about Walmart, they are one of the most successful companies in the World.
This opinion piece makes an interesting argument that a way to revive the economy is for a new bank to rise up, lacking the toxic assets plaguing other banks, and that the nation's largest retailer Wal-Mart is best positioned to do such a thing. The article makes interesting arguments for this scenario, and rounds out with the challenges that could occur if such a thing were to occur.
If Wal-Mart were to get into banking, would the potential benefit of stabilizing the economy outweigh the dominance they would effectively have over it?
The article has the interesting premise that a huge new bank free of the asset and liquidity problems of existing huge banks. In a way that's what the Treasury's 'bad bank' proposal would create by getting the bad assets off the books of existing banks. But if the real problem is that banks now fear lending even to entities with good credit ratings, why would Wal-Mart, even with its supposedly superior insights into its customers, be any different?.
And why would we think that one of the world's more unsavory corporations would be immune from unsavory banking practices???
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