Manhigut – Loans And Mortgages Information

Subsidies to U.S. banks in crisis

by admin on 22/11/08 at 7:30 pm

The United States has decided to fund some banks to try to take a hand in the economic situation more and more tragic.

Mark75 of banche.blogspot has assessed this transaction does not precisely the most excellent:

• Assumed to support Fannie Mae and Freddie Mac is not balanced by guarantees from the two banks, nor the U.S. Treasury is in no way secured creditor, which on the one hand it is understandable for the determination of support without too many constraints in the two giants difficulties, but moved all the risks on government finances.
• Some sections will be noted that as things stand, Fannie Mae and Freddie Mac could also distribute dividends (which would be dedicated instead to a fund to repay in small part to the support of government), which objectively is a contradiction in a ‘ company in crisis who need support from the government.
• The measure seems to travel a dangerous road of privatization of profits “, which are maintained by a few, and” socialization of risk “, where the losses are distributed among the contributors: in addition to being an ethically incorrect scenario, a scenario is especially dangerous since in fact is encouraging risky behavior (not so much because they suffer the costs).

In addition, there are those who would rather emphasize that helped even those who now want to buy a house.

In my opinion it is not easy to assess millions of people in crisis to those who allocate a fund for help, threatening to discriminate.
Certainly lost a fund for the banks will only delay any further crisis, but certainly at this moment the world has no need of further collapse.

It could very easily create a chain banking crisis, which could send the total panic in the global financial system, bringing a further crisis, Thursday black model of 1929.

It should be noted that funding of this kind also discriminate on the side of the business and it is precisely for this reason that in Europe, this type of aid to companies is prohibited, but perhaps this time the measure is justified.

Surely even in Italy it was used a measure of its kind to save a bank, since it represents the confidence of the financial system. The crisis is already very strong in the financial world; a further collapse could crack the latest security.