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Greenspan warned of new bank failure |
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Tuesday, 05 August 2008 |
There are more banks and financial institutions, which may prove to win and needing to be rescued by the government said the former president of the U.S. Federal Reserve Alan Greenspan. As shown happened with Northern Rock in the UK and Bear Stearns in the U.S., Greenspan says that maybe there are many more banks and other financial institutions that are on the edge of bankruptcy and will be completed after the intervention of governments.
 In his crisis of credit markets is not done and to become witnesses of more problems because of it, reported Financial Times. Along with the warning of a continuation of the crisis, Greenspan draws attention and that too strong intervention of regulators may cause more bad than good consequences and would lead to new pressures on prices of the shares .
He called and a warning to governments to careful if have to change some of their views on economic activity because of increasing inflationary pressures. If such a thing happen and be taken to close the markets, this "would lead to a slowdown of globalization with great force"
Former Chairman of Fed also said that the current financial crisis is an event that happens once or twice per cent years and its roots are deep in fears of insolvency of major financial institutions. According to Greenspan this crisis of confidence will end only when house price in the U.S. begin to stabilize.
Greenspan is of the opinion that later in the year weaker activity in the primary housing will transform in a significant decline in new housing, which will allow rapid pace of liquidation of many stocks . However, this would place only if they meet the forecast for maintaining the current level of demand for housing. |
Banking 
