Most banks have state of the art risk management systems. Especially after the World Com sage of early this century, they were required by law to manage their risks better so that their actions can never jeopardise the whole economies again.
Never again… Yeap, famous last words!
No one saw it coming – at least not the enormity that it hit the markets with. Credit crunch turned nasty and became a crisis of mega proportions.
No amount of risk management predicted that vast amounts of money will be required to try to fix this crisis. Britain has committed almost £500 billion. US government has poured in double that amount into their financial institutions. Many other governments and EU have done the same.
Some people are moaning that governments managed to find this money to save banks overnight while our own NHS has been broken for years and politicians have been making all sorts of excuses to find a fraction of that money. Well, all I have to say is this: we can live with NHS as it is for a little while longer but if our current banking system fails, we are in deep deep trouble for decades to come.
That is why governments around the world have been anxious to avoid the financial catastrophe.
Implications of credit crisis:
What are the implication for an ordinary citizen after government’s valiant steps to stop the damage to our banking infrastructure?
You can read this full article, go here:
Credit Crisis – Your 7 Burning Questions Answered
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