Mind-boggling

With further unfolding news, the question that is utmost on my mind right now is, who hasn't got money with the Icelandic banks?

Now it has emerged that several charities have money stuck with some of these banks. (http://news.bbc.co.uk/2/hi/uk_news/7663136.stm). It gets worse and worse...

How can this happen? The mind boggles. How could this have gotten to such a critical stage? Were there no warning signs? If so, why were people not cautioned? Economies -- and banks -- don't collapse with no warning. Or rather, they shouldn't. I guess this is what is meant as a 'free market.' Caveat emptor; buyer beware. Everyone's allowed to come in to do business in an environment unhampered by tight controls - fair enough. But it only works in a perfect market, when it is balanced by investors and savers having access to all information. When the second part of the equation is not present - as is the case now - chaos result.

Gordon Brown has come out in the media today to call for "Strong banks, unfrozen markets, greater transparency and international supervision", citing them as the four keys to recovery. He is calling for a global solution to a crisis. http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article4916344.ece


Funnily, when Mahathir intervened to stabilise and support our financial system 10 years ago during the Asian financial crisis, he was condemned by the same nations who are now advocating the same thing. Let the banks collapse, they cried. And some countries did; Thailand, Indonesia, those who all went the IMF route and bore the pain. Years later, the IMF admitted that theirs may not have been the best solution.

And meanwhile, we will continue to watch the saga unfold....