TALKING BUSINESS: The banks and the crisis
Are bank managers to blame for the world financial crisis?
Amid the havoc of the world financial crisis various measures are being proposed to tackle it as well as forestall a similar collapse in the future. The crisis, now global, originated in the United States and some economists are understandably searching for explanations in the US economy itself. To them, the main reason for the crisis lies in dramatic structural adjustments in the American economy and, in particular, spectacular shifts in its real estate sector. In recent years, on the eve of the crisis, the US exported many jobs to countries like China and India without compensating for that flight of labour. Without protectionist measures many US economic sectors have faced a decline. This has also made it impossible for employees of those particular economic sectors to pay back loans and mortgages. The result has been massive defaults and a follow-up wave of bank runs.
