2 chapters across the catalog
The Belgian-French bank Dexia is facing a liquidity crisis, leading to a rescue plan involving the creation of a "bad bank" to house toxic assets. The French and Belgian governments are intervening to prevent the bank's troubles from destabilizing the broader eurozone. Taxpayers are expected to cover the costs of the restructuring as depositors begin withdrawing funds.
The hosts discuss various economic theories, including the British model of bank insurance and the "bad bank" concept. They reflect on the history of economic thought from Karl Marx to Milton Friedman and predict a new economist will emerge to explain the current crisis. Dvorak looks back to the innovation boom of 1890, featuring Tesla and Edison, as a potential model for a future recovery.
