Market based solutions to the financial crisis

If you want to nationalise a bank then you are putting it into the hands of the state, therefore the taxpayer, so how can you be fair to the people of a country when you nationalise a bank while also giving the shareholders and bondholders some opportunity at redeeming at least a portion of their money, and most importantly, how do you do this with a market based solution? Is there a market based solution?

Currently the answer has been to take the good, the bad, and the ugly onto the national balance sheet. Is this really what the taxpayer wants? Instead would it be better if they only took the good assets – thus protecting the tax payer, and left all of the toxic debt to the bond and shareholders and let them see what they can get out of the remaining assets?

They may not be getting protected (shareholders/preference shareholders/bond holders) but when was it a taxpayers responsibility to protect investors of any firm? It certainly is not in …

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