Were the all-around sureties for suffering banks like HRE really the ideal form of crisis management?
With his comment on my C4-Rice-Article, Chris reminded me that I had also written something in favour of a controlled insolvency for HRE (Hypo Real Estate).
🙂 That is another matter I am remaining steadfast about.
I still believe that a federally controlled insolvency, along with a differentiated security for relevant areas of the bank would have been the better choice. Allowing insolvency would at least have been more elegant and cheaper for modifying certain structures that had been running astray than giving an all-round security for all the bank creditors. I am sure the legal restrictions required for such a procedure would have been easy to provide during the critical phase by introducing new laws.
Even if the majority of parties concerned assures us that the right measures have been taken, that does not necessarily mean that they are right. And it is too easy to accept decisions of such momentum with the argument that there were no alternatives.
For me, it is important that someone has to be courageous enough to question even these kinds of decisions and swim against the current. And what is more: I know more than one liquidator of excellent reputation who shares this opinion of mine.
That is why it shows ignorance if you consider measures of this kind correct, just because a political majority has agreed that is was the correct behaviour in the “crisis”. What I sadly miss is an exercise in “lessons learned”, where the crisis management would have to be analysed and the best possible solution be found. After all, we seem to have learned so little from the past that there is a high risk of similar things happening in the foreseeable future!
(Translated by EG)