Do Banks Deserve to be Rescued?

The Swiss government just announced this morning that it will put CHF 6 billion into the largest Swiss bank, UBS. Now on one hand, I’m relieved because I’m glad the Swiss are no longer in denial about the financial crisis, not to mention UBS is my bank and so I want my money to be safe. But at the same time, UBS has made bad decisions. Greedy decisions. And what did I get out of their years of crazy profits? Basically zero interest on my savings account. So I think now that their bad decisions have caught up with them and they’re getting helped with my tax money, then I should get to see some benefit—i.e. an interest rate greater than .5%. (Yes, there is a point in front of that 5.) Sound fair?

Another option for governments around the world would be to stop taxing the tiny amount of interest people get on their savings accounts. Especially in the United States, where people have a real problem saving money, this could be an incentive to start getting out of the red.

The Swiss government is also proposing to raise the protection of bank accounts to a number (not yet disclosed) over the current CHF 30,000 even though last week they said they wouldn't consider that. Wow. Perhaps they are finally worried that in this financial mess everyone with money will take it out of Swiss banks and put it somewhere more protected. And without banking, then what will Switzerland be worth?

Nothing but a few thousand pounds of cheese.