My good friend Allan Sloan has a great Fortune column out today.
His point is that shareholders of nearly all the bailed-out American banks were essentially wiped out.
Some of those shareholders were none other than the top executives whose risky bets — or whose failure to supervise their subordinates’ risky bets –drove those firms to the brink of collapse, and shoved the entire U.S. economy into the deepest recession in generations, costing millions of people their jobs.
It’s good for the financial system to see holders of bailed-out institutions suffer this kind of pain, because fear of suffering losses is arguably the most powerful tool there is to make institutions act prudently.
clipped from norris.blogs.nytimes.com
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