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Bank Recapitalization: Another Bad Idea

posted 9 Nov 2017, 02:25 by harp guy
The government's recent announcement to recapitalize state-owned banks using public funds is a classic case of "throwing good money after bad." The creative-destruction process of free markets requires that bad bank's exit in a controlled way and free up market share for other viable banks. In a capital-scarce country like India, the government should encourage this adjustment instead of preventing it. 

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