Edvards Slesers
Mr. Polis
11.09.2010
Pros and cons of the Government involvement in the banking sector: Case of the Parex Bank
A very important matter to understand is when the nationalization* of Parex Bank happened. It happened at the beginning of an economic recession* when many businesses and individuals started taking money out of Parex bank with the fear that the bank might bankrupt. With this fright of bankrupt, more than 60 million Lats were taken out of Parex within a week by Latvians who has money saved in Parex.
Pros: Without the nationalization of Parex Bank, Parex Bank would have surely bankrupted. Because of the government taking control of 51% of the bank and investing large sums of money into the bank, it was able to continue working and not bankrupt. If the government would have decided not to do anything about Parex and simply let Parex deal with its own problems, then soon they would have realized that Parex problems have turned into their o
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