By Anshu Dixit
Bank plays an important role in our life. Many of our life’s big decisions depend on these banks. All of us know that due to the current economic situation most of the industries are not doing really good. Bank industry is one of them. A crisis of historic proportions struck financial institutions in the U.S. and globally in September, 2008. Major financial markets went into a free-fall after The U.S. government took over mortgage lenders Fannie Mae and Freddie Mac. As a result, several banks and investment firms were went bankrupt or were bought by other companies at well below their value. Research has shown that majority of people blaming investments system banking industry for this financial disaster. But banks are one of those firms as well who is bearing losses. For example, JPMorgan Chase & Co's robust $3.6 billion quarterly profit this year. JPMorgan's earnings were not uniformly positive. As expected, losses on loans still rose and net charge-offs on consumer loans climbed to $7 billion. Does not it show that our economic condition is improving? Like some people are blaming financial institutions for this crisis, some other people are blaming our government policies for this economic problem. On the other hand some people are supporting our government as well. Paul Krugman a columnist on the Op-Ed Page and continues as professor of Economics and International Affairs at Princeton University, said in his article that “So what saved us from a full replay of the Great Depression? The answer, almost surely, lies in the very different role played by government.” He thinks that government has done a lot for to come out from this economic problem. And if we will flip the coin, other side some people are blaming the government for all this. So, who is really to balm for? Banks or the government.
No comments:
Post a Comment