The Zombie Test

Tim Geithner's bank bailout plan has engendered lots of suspicion and a fair amount of hostility. The most important element, I think, is the Zombie Test, which would force bailout recipients to show their financial hands and thus reveal whether they are in fact solvent - are they real banks or zombies.

One way or the other, the taxpayers are picking up much of the tab for the blunders and excesses of the financial sector, but we really shouldn't keep pouring resources in to banks that are already bankrupt. The real zombies need to be disposed of if the merely sickly are to be saved.

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