Banks woes: Creditless banks, penniless governments

In the US and in Ireland, governments have been scrambling again to support their banks. For the economic prospects of these countries, and the world economy, that is troubling. Recession is only just beginning and yet many banks are holed. Governments are being obliged to pour in more capital, adding to the huge liabilities they now face. This vicious circle augurs poorly for recovery. It is not that governments should avoid intervening in banks. They are obliged to. To put public money into t...