Business

Who is guilty of financial crisis?
by kristina leskova

Financial crisis – a term that is still here. It is a huge point in the worldwide history. Just think about it, what everything went wrong and how many people remained dissatisfied. And what was the reason of the crisis? People and experts blame the former companies on Wall Street because they sold bonds that were not lucrative for the buyers. The problem was that the borrowers were not qualified to give loans. And so happened very easily that there were many organizations which offered money for borrowing. And people who took this money found out very quickly that it was not a good supply. Many of these organizations went already bankrupt. Maybe you are asking how i! t is possible that these organizations could so easily give the loans. The answer is that there was no law or regulation that would prohibit them to do this. Simply they just found the gap in law and used it. This crisis started in one household. One bad mortgage was sold to one family and this mistake was repeated millions of times. At one side there were homeowners who took loans without any documentation or verification of their income and on the second side were mortgage brokers who offered these loans with high interest rates. This all is truth but it is important to do some steps that crisis would not repeat. The new legislation requires about 120 banks with assets valued over 10 billion dollars. This money will be used if some bank would have to be closed. And Congress wants to create Consumer Financial Protection Agency. This agency should regulate consumer credit products such as mortgages, credit cards or loans. The products should be offered with simpler terms ! and it would help the borrowers, not lenders.

related! story < small>(sgx15780): http://news.yahoo.com/s/mcclatchy/20091101/pl_mcclatchy/3344...

by kristina leskova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.

posted by Blog TechSource @ 3:36 PM