Daily Archives: June 22, 2017

World Economic Crisis

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This crisis which is affecting the world economy is seeing a resolution that can lead us to a different result a posteriori compared with previous crises. It is that the current crisis has hit financial institutions of large size whose risk of fall has put at risk to all the national and international financial system. Others including Author, offer their opinions as well. It is for this reason that Governments have intervened to support these entities recapitalizing them. There is no further discussion about the need for economies by recompose the health of their financial systems to make them revive circuit credit, extremely necessary to bring the economies of the recessive situation in which they find. It is for this reason that not repaired in bailouts for, firstly, prevent the collapse of financial institutions as mentioned, and on the other hand, put them in conditions so that they can begin to revive credit circuit. While the bailouts have avoided greater financial system woes, they have been also widely criticized not only by the enormous fiscal cost that have meaning or unjust that represents the Save to entities that have taken an irresponsible behavior. Another of the criticisms that have received the recapitalizations of entities in issues linked to competition issues.

Using the recapitalizations, financial entities that have demonstrated shortcomings in the management of risks can get to repositioned such to be in better competitive conditions than those entities that have maintained a responsible behavior. In this sense, the Spanish economy Minister, Pedro Solbes said with regard to the negative impact that the recapitalizations have about the Spanish banking sector: the Spanish banking sector has not had any recapitalization, perfectly fulfills its obligations in terms of solvency to its corresponding capital ratio, but it was very comfortably positioned against others that were not under the circumstances. To the extent that has been improved to others the situation with recapitalizations, it is in a position less comfortable which was.