You've as a country determined that an institution is too important to your population and your country's stability to have it go bankrupt. But instead of growing your economy through it, you through actions deem it okay to siphon money to the private owners instead of the people paying for it through taxes.
The existing common equity (and IIRC preferred stock) in a number of entities was massively diluted by issuing new preferred stock and warrants to the US government.
Here are two examples, they were among the worst offenders. Look at the share price for Citigroup and AIG:
https://finance.yahoo.com/quote/C?p=C https://finance.yahoo.com/quote/aig/?p=aig
If you owned pre-crisis C common stock, you're still down about 84%. If you owned pre-crisis AIG common, you're still down about 95%. (that's approximate, done by eyeballing the charts). Edit: Yahoo Finance charts have been getting worse and worse, you need to click "Max" to see the proper timeline.
I don't follow UK equities closely, but I think the same thing happened to a number of UK banks at the time. E.g. RBS.
Unfortunately the whole thing was quite uneven. E.g. Goldman Sachs took advantage of the morons at AIG who sold them very cheap "insurance" such as credit default swaps. But Goldman was made whole. What should have happened is that Goldman should have been made to share the pain.
Edit: I'm of course talking about the '08 financial crisis in general. I don't agree that the Libor scandal was significant enough to nationalize the banks as punishment. I'd much rather see a few bad actors taken out back and shot. That would be much more salutary in terms of deferring future bad behavior.
They should have just let the market work and the banks go under.
It would have been a financial loss but a moral victory. An important lesson about carefully choosing who you trust.
http://www.telegraph.co.uk/business/2017/09/07/nicky-morgan-...
If they have questionable ethics, so will the industries they run.
The real problem isn't banking, it's neoliberalism's sanctification of individualistic greed. When collective morality decides that almost any behaviour is acceptable as long as a few people make a big profit, the political and moral consequences are unlikely to be positive.
I also love it when some people are just "Too Big To Jail (TM)"
> Those investigations uncovered substantial evidence "that senior bank officials were complicit in the illegal activity."
> On Tuesday, not only did the US Justice Department announce that HSBC would not be criminally prosecuted, but outright claimed that the reason is that they are too important, too instrumental to subject them to such disruptions. In other words, shielding them from the system of criminal sanction to which the rest of us are subject is not for their good, but for our common good.
> The New York Times Editors this morning announced: "It is a dark day for the rule of law." There is, said the NYT editors, "no doubt that the wrongdoing at HSBC was serious and pervasive." But the bank is simply too big, too powerful, too important to prosecute.
https://www.theguardian.com/commentisfree/2012/dec/12/hsbc-p...