Bank bail-outs: Quids pro quo

How much influence will governments have over banks? AS WELL as capitalism’s future, a recent congressional hearing on American International Group’s bail-out debated an invoice for $1,488 from the salon at the St Regis resort, California. The insurance firm had hosted an executive jolly there. “They were getting their manicures, their facials, their pedicures and their massages,” spat one congressmen, “while the American people were footing the bill.” Microscopic scrutiny is a cost of having the taxpayer as a shareholder. Not that this has put off banks and insurers from queuing to receive capital injections (see chart). Governments are likely to end up as the largest shareholders in developed countries’ financial systems, with $500 billion or more invested, or roughly a quarter of the industry’s market value. ... (link)