We have a report that the Federal Reserve is making inquiries with the Scandanavian banks regarding how they handled their banking crisis in the early 1990s.

What they did back then was nationalize their banks:

Scandinavia’s bank rescue proved successful and is now a model for central bankers, unlike Japan’s drawn-out response, where ailing banks were propped up in a half-public limbo for years.

…

Norway ensured that shareholders of insolvent lenders received nothing and the senior management was entirely purged. Two of the country’s top four banks – Christiania Bank and Fokus – were seized by force majeure.

“We were determined not to get caught in the game we’ve seen with Bear Stearns where shareholders make money out of the rescue,” said one Norwegian adviser.

“The law was amended so that we could take 100pc control of any bank where its equity had fallen below zero. Shareholders were left with nothing. It was very controversial,” he said.

Works for me.

Senior management gets the boot without golden parachutes, shareholders get nothing, and then people think twice before they pull this crap again.

Unfortunately, property is the one true religion of the good old USA, so I don’t think that it would work here.

But it is probably the best solution.