Joseph Stiglitz: Banks should have been nationalized

2 November 2009

Joseph Stiglitz, a Nobel Prize-winning economist, has told an economic conference that US banks should have been nationalized at the height of the financial crisis.

Last week it was announced that the US economy had grown by 3.5 per cent in the last quarter but Mr Stiglitz remained adamant that the government's failure to nationalize the banks was hurting the taxpayer, reports Bloomberg.

Speaking in Shanghai, he said that it would have given the government more influence over the banks, which would have increased lending and helped economic growth.

"We have this very strange situation today in America where we have given banks hundreds of billions of dollars and the president has to beg the banks to lend and they refuse," he stated.

Last week, Mr Stiglitz said that although the overall financial picture had improved since the collapse of Lehman Brothers in September 2008, he did not believe the world was close to a robust global recovery.

By Tony Aynsley

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