I came upon this article by Scott A.Kjar . Though his argument theoretically seem correct, I believe the bail out is necessary without which lot of banks would collapse and the one to be most affected would be the common man. The bailout might be helping the banks whose policies were managed by the greedy and dumb guys, who failed to foresee the catastrophe, but I don't find this reason to be strong enough for people who had invested in these institutions also to suffer.
The increasing liberation policies and complex instruments make the functioning of banks and economics incomprehensible to an ordinary man and is really tough to expect him to analyze this situations beforehand, when seasoned economists themselves have been left confused. The bailout in turn must be followed by stricter regulations of the market and trail of those responsible.
Broken - Part 1
8 years ago
2 comments:
The plight of some of the Indian Banks are due to their yearning for getting more profit. Investing their funds in foreign banks led them to higher profits and when they are broke now, they are suffering. ICICI was saved as they had enough cash reserves not to plunge into crisis, but its a close shave. Probably its a lesson hopefully our Indian banks will learn
Correctly said Ivan, one thing that worries me is the fact that our Chidambaram wants to deregulate the matter even now :(
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