OPEC, Thanks for the Oil. Now Bail Us Out, Please

Should the Middle East prop up our financial system?

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If our banks are running short of ready money, maybe we should just call the Organization of Petroleum Exporting Countries. In yesterday's Financial Times, business Prof. Anil Kashyap of the University of Chicago and economic Prof. Hyun Song Shin of Princeton University propose sending Condoleezza Rice to the Middle East to broker a deal where the region's sovereign wealth funds recapitalize our banking system. The pair of profs do acknowledge the sensitive political realities of such a move:

Finally, in case our proposal sounds unpalatable, it should be compared with the alternative in which the banking system deteriorates to the point where a public recapitalization becomes inevitable.