Introduction to Bank Recapitalization

By Iakovos Alhadeff

This essay explains in very simple words the problems encountered by banks during periods of severe economic crises, like the crises of 1929 and of 2008. Moreover the document describes the means that banks have at their disposal to combat such crises.

This is a non technical document and does not assume any prior knowledge on behalf of the reader. A genuine interest will suffice. After reading this essay, the reader will have an understanding of banking crises. What they are and what can be done about them.

• Language: English
• Publisher: Iakovos Alhadeff
• Release date: May 12, 2014
• ISBN: 9781310193064

Iakovos Alhadeff

I have studied economics to postgraduate level. I never worked as an economist though. I worked in the field of charter accountancyand I completed the relevant professional exams (the Greek equivalent of the English A.C.A.). My essays are written for the general reader with no economic or accounting knowledge, and the emphasis is on intuition. All my documents are extremely pro market and quite anti-socialist in nature. I admire economists from the Chicago and the Austrian School i.e. Milton Friedman, Ludwig von Mises, Friedrich Hayek, Henry Hazlitt, Murray Rothbard. I am Greek and English is not my first language, so I hope you will excuse potential errors in my syntax.

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Introduction to Bank Recapitalization

by Iakovos Alhadeff

Published by Iakovos Alhadeff at Smashwords

Copyright 2014 Iakovos Alhadeff

TABLE OF CONTENTS

Introduction

A Banking Example with Recapitalization

How Recapitalization Takes Place

A Banking Example with Liquidity Crisis

The real world

Introduction

After the economic crisis of 2008, and the banking crisis that followed, we have all heard hundreds of times the expression banking recapitalization. Because most people do not know how banks work, populists have extensively used the banking industry in order to disorient the public, and achieve political benefits for themselves. The way they do so, is by telling the innocent and ignorant on the subject people, that the government gives lots of