Banking reforms

[avnboyavn]

Guys,
I really wanted to discuss this topic, after the 2008 global economy crash the most hit sector was the banking and finance sector. Alot of people lost their jobs , we also saw a lot major banks failing like lehman brother , merill lynch . Failures of these banks is another topic . What concerned me was the questions which were raised over the regulations of the whole industry like regulations of the SIVs , ABSs, CDOs ,CDS etc.
This also raised a huge question over the banking system as a whole. The banking has gone under tremendous change over the period of time after the abolishment of the glass-steagall act , banks grew aggressive actually they became more than aggressive over their investment strategies .Thus , what happened was global demise.

I would like to know what are your feelings over this matter, do you guys consider that their should be a new economic reform like bretton woods 3 or even re-enactment of the glass-steagall act .There has been recent talks over the introduction of Basel 3
Do you guys think any of these steps will resolve the problem . Please contribute.

Regards

 

[princebehl]

Hi Avinash,

I you talk about banking industry's failure, it is worth noting that just because of absence of BASEL 3 has not led it. As you already mentioned Banks were more than aggressive in making profits has resulted in such a fiasco. I would like to mention in such a competitive industry people do anything to meet their targets, which give rise to bad loans as we all have seen.
Apart from this there is no distinction between investment banking and commercial banking in current architecture which has led bank to pool in their money in more risky investments in order to make bigger profits.
Then from economy point of view, we should measure its efficiency with real GDP not with nominal GDP as it might have been created due to increase in asset prices which further creates bubbles. As we had seen that in America most of the investment in housing industry was done by investors and speculators who do not want to make use of those houses, while on the other part in India, in a recent survey it was mentioned that 97%u0025 of houses purchased are used by owners to stay there and not to make just profit out of it.

Right I can think only these, please share your perspective also on this problem.

 

[jitendra05]

Guys,
I really wanted to discuss this topic, after the 2008 global economy crash the most hit sector was the banking and finance sector. Alot of people lost their jobs , we also saw a lot major banks failing like lehman brother , merill lynch . Failures of these banks is another topic . What concerned me was the questions which were raised over the regulations of the whole industry like regulations of the SIVs , ABSs, CDOs ,CDS etc.
This also raised a huge question over the banking system as a whole. The banking has gone under tremendous change over the period of time after the abolishment of the glass-steagall act , banks grew aggressive actually they became more than aggressive over their investment strategies .Thus , what happened was global demise.

I would like to know what are your feelings over this matter, do you guys consider that their should be a new economic reform like bretton woods 3 or even re-enactment of the glass-steagall act .There has been recent talks over the introduction of Basel 3
Do you guys think any of these steps will resolve the problem . Please contribute.

Regards

Hey friend, thanks for sharing and uploading such a nice information and suggesting the topic for discussion. It is really very interesting and important topic. Well, i have a document and would like to share it with you regarding bank reforms so please download and check it.