After the market meltdown of 2008, along with the sudden realization that our Banks faced and were vulnerable bankruptcy, our authorities stepped in and bailed many of those Banks out with tax payers money taking over their debts. The outdated Banking system was complicated, large banks became utilized depositors savings to hand out loans to consumers outside their national boundaries, and often internationalized together with the Global Economy. This ended market realized these profits were predicated on stocks and overvalued property prices in the united states and the UK Technically leaving those Banking giants vulnerable to debts, and the private debts of lenders because of over-extended credit. |
Many people were angry, those in debt and not able to get further credit faced personal insolvency, whilst the abrupt understanding that our Bankers who are traditionally pillars of good money management, had proven to be short-sighted and bad at cash management as a compulsive gambler at a casino.
However, that was then, so what's the future of these Banks? Most Bailed or Nationalized Banks are in reality Global Banks. Although they are more vulnerable in one Country that means, they might be profitable in another nation. Citibank are a Fantastic example of this, with a presence in many Countries from the World. In most instances big Banking issues have an 'autonomous' Branch in each Nation, which often means they are protected rather than Internationally. With Governments effectively "owning" many of these worldwide Banks, these abroad "Branches" may be sold off to localized interests. This was the case of Morgan Stanley that sold off its Asian-based Branch to a cartel of neighborhood Investors. This should reduce the excess fat off those bloated, over-exposed Banks, and bring in extra income that should help to reduce their own massive cholesterol amounts. Therefore, technically severing ties of those regional banks, that stay profitable, locally.
Selling assets increases money, and could help alleviate the burden nationwide these failed banks have passed onto Governments through the Taxpayer. Banks that are more exposed could eventually become 100 percent owned by our Governments. As debts bracket, and the banking system is reformed.
Governments at the long-term claim these toxic Banks will be finally privatized when they're downsized, and rewarding sections of those banks are sold off. This depends on an economic recovery, as our authorities technically purchased these stocks in line with the current share value. Once the share value increases, and surpasses the initial cost technically these stocks could be sold at a gain, bringing in additional revenue to our Governments. In concept that this has occurred previously, Indonesia is a good illustration:
After the Asian Crisis of 1998, Indonesia had countless vulnerable National Banks, that were merged or taken over by the Government. As local Banking laws regulating Banks were, these Banks were reformed. Hence Internationalizing the Banking system in Indonesia, though except in the case of ABN Amro, no International Bank in Indonesia has dropped or been bought from the National Government.
This activity was requested by the IMF that granted Indonesia billions of dollars in emergency loans, loans that the current Government are still paying off today. And is probably the modal our authorities hope to emulate, in order to conserve our banks, reform them eventually sell them off in a gain.
One question still haunts our Governments and perplexed taxpayers: What happens if our Economies don't recover? The effect of enormous Bank bailouts has meant that these Banks are in fact. Many Governments say officially they have yet to be nationalized, but are National property. If a comeback fails to materialize, then authorities can simply take over these Banks officially, by buying out the remaining minority investors or by announcing them National property.
That is the situation, as our Governments when it comes to home, any land these banks own through Mortgages and own our debts. Housing now could in fact become property that is National, together with Mortgage payments going to the State.
In economic terms if Banks are totally Nationalized authorities control our debts, the money supply, businesses and housing. Our Economy would turn into a command economy. We will "own" our personal land, but only if we could repay the debt owed into those new State Banks. In an extreme scenario our Banks could be merged into one single State Bank.
Total control of the market by our Governments might be the last alternative left, in the instance of a total failure. It might also lead to strict controls on policy, and in Countries affected by the Crisis a change of currency.
Both of these scenarios are feasible, and much depends on if our Economies begin to recover. Is that Bank bailouts, have created a dependency on the economy regaining, otherwise we could confront living in a State that's been made to become Communistic in order to survive an entire financial collapse. Account opening for you or your business can be difficult if you are not in the same country as your Bank or if you are in an industry that most Banks would not support. With traditional Banks it is difficult to open corporate or private accounts without sending documentation, followed by lengthy in person meetings and questioning. Black banx, licensed in various countries is providing digital banking facaility in 180 countries.
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