IDEAS home Printed from https://ideas.repec.org/a/bpj/evoice/v5y2008i6n5.html
   My bibliography  Save this article

Paulson's Latest and an Alternative: Why the Treasury Should Buy Common, Not Preferred, Stock and Why LIBOR Deposit Guarantees Could Backfire

Author

Listed:
  • Carmel Jonathan

    (University of Michigan)

Abstract

Many are enamored of recapitalizing the banking sector by injecting government funds into distressed banks in exchange for preferred stock and equity warrants. This appears to be the core of the Treasury's most recent plan. Jonathan Carmel points out that this approach can actually create more problems than it solves by adding to the bank's debt overhang problem. If public funds are to be used, a better approach is to directly capitalize the banks by buying common stock and distributing it to taxpayers, suggests Carmel.

Suggested Citation

  • Carmel Jonathan, 2008. "Paulson's Latest and an Alternative: Why the Treasury Should Buy Common, Not Preferred, Stock and Why LIBOR Deposit Guarantees Could Backfire," The Economists' Voice, De Gruyter, vol. 5(6), pages 1-8, October.
    • Handle: RePEc:bpj:evoice:v:5:y:2008:i:6:n:5
    DOI: 10.2202/1553-3832.1444
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1553-3832.1444
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.2202/1553-3832.1444?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:evoice:v:5:y:2008:i:6:n:5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.