When Citigroup announced on November 24 that it had struck an agreement with the US government to isolate some of its most distressed assets, it was a stark reflection of the haphazard and indiscriminate nature of the federal response to this crisis.
If carving out bank balance sheets to create good banks and bad banks sounds alarmingly familiar, that’s because it is. Isn’t that what was suggested for the monoline insurers nearly a year ago? Isn’t that what Lehman Brothers was proposing to deal with its real estate exposure shortly before it imploded? Isn’t that kind of what the original Troubled Assets Relief Program (Tarp)...
