IMF Warns of Fresh Worldwide Crisis


Anyone else hear a...a sucking sound?

Inquiring minds are looking at the world banking system and noticing new cracks in the global banking dam. In the Daily Mail’s article, “International Monetary Fund Warns…” a fresh crisis is forming as bank regulation is failing:

The world could face a fresh financial crisis unless large-scale reforms of the banking system are made, the managing director of the International Monetary Fund, Dominique Strauss-Kahn, has warned.

Speaking at a Washington press conference, Strauss-Kahn said: ‘We need huge enhancements in global supervision.’ Otherwise the risk is that the ‘holes and loopholes in the system are the seeds of the next crisis’.

His remarks came as European banking regulators meeting in London are poised to take tougher-than-expected action on pay, by imposing a cap on bonuses.

Brussels also stepped up the heat on banks by backing a ‘transactions tax’ that could see financial groups taxed on profits and executive pay.

Only last week it was revealed that Goldman Sachs bankers in London had quietly been granted special share bonuses worth tens of millions of pounds.

The IMF’s managing director made it clear that he is not satisfied that new capital requirements — such as those arranged at Bank for International Settlements — are enough to rein in reckless behaviour.

‘Regulation is fine, capital requirements are fine,’ he said dismissively, before weighing into banks and governments for not implementing ‘consistent’ regulation.

Banking supervisors from around the world, including the Bank of England, have been struggling to come up with a mechanism that will bring an end to the idea that banks ‘are too big to fail’.

Sounds just like a couple of years ago when the US just had to ‘save’ the banking system. Of course, don’t look at how it affects the average person.

Besides what happens when a bank, or even a banking system, fails? Why other people with money just step up in the vacuum to fill the need in the market. A bank may be the easiest business to replace.

Now, a manufacturing business is not so easy. Again, take a look at which countries build a good automobile. In fact, any automobile. It is one of, if not THE most difficult, products to build. Think of the different parts…design, computer, high-tech industries, heavy industries, etc. Most people don’t realize the basic car is a very complicated and hi-tech piece of machinery.

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