The global financial crisis
has spared none - individu
als and institutions, rich and poor, developed and
developing countries, financial and non-financials institutions. Each
one has experienced the heat of the financial meltdown in one form
or the other.
It is, therefore, interesting to observe that an
all-out effort has been undertaken by most of the
developed countries to bail out their big banks and insurance
companies. But regrettably this has not been enough. There is no visible
effort to provide succor to small people and micro institutions.
Global taxpayers have already paid around $8 tn to bail out
big global banks. But no such big scale effort has been made to
bail out poor borrowers even for their dwelling house mortgage loans. None can deny the fact that poor people, even in rich
countries, have been affected by the present financial crisis. A helpless
situation may force them to commit crimes for their survival, if
immediate succor is not provided.
It has to be appreciated that the credit crunch resulting
from liquidity crunch—one of the key reasons of the present
financial crisis—affects the poor more adversely as many, to a great
extent, are dependent on financial institutions. In fact, it ripples
through the entire economy affecting each and everyone. This happens
because it raises the cost of credit and makes it scarcer each day
and makes it difficult for people to borrow from formal banking
institutions. |
