Archive for the ‘Financial Crisis’ Category
The idea that the financial crisis facing the United States due to an abnormality in a segment of the mortgage loan system is wrong. Irresponsible mortgage lending and poor quality have not been able to generate for themselves this crisis. There are deep connections in the financial system that explain why we may be witnessing the outbreak of the worst financial disaster since 1930.
The poor quality mortgage loans originated in interbank competition to dominate the U.S. market. In that fight, banks resorted to irresponsible mortgages placed, without analysis of credit history, no income verification, no down payment and so forth. But it is essential that these practices were used in 60 percent of total mortgages in the U.S. in the last two years. Hence the collapse of the mortgage market is widespread. And the effects on non-residential mortgage market (shopping centers, offices) are already being felt. The problem is compounded because the same irresponsible practices spread to consumer loans, credit cards, financing purchases of cars and even college tuition credits.
But perhaps the most important connection to the financial system is in practice called monoline insurers and the securitization of mortgage securities. For its triple-A rating on the market, monoline insurers provide a guarantee for bond issuers in return for a premium. This mechanism reduces the cost of financing to the issuer as the purchaser of the bonds feel you have a premium support.
The Austrian bank has provided in the whole of Eastern Europe 230 billion euros. The equivalent of 68% of Austrian GDP, 38 billion in Romania, a country where the credits were 54% in euros and the rest mostly in lei. The euro mortgages have been common in a change of 3.6 lei per euro. But the leu has depreciated by 20% since September 2008 disproportionately more expensive the loan repayments in that currency. The latest data available from the National Bank of Romania (BNR) in November 2008, indicate that most of the bad loans given to individuals are granted in lei, are of little value and have no guarantees. Until then, the credits in euro showed alarming levels of arrears but will be seen how affected the sharp drop in domestic currency produced between December and January and seems to stabilize at 4.26 lei per euro. From the Austrian headquarters are transmitted messages of peace. Andreas Treichl, CEO of Erste group, owner of BCR notes that his project in the Balkans is long term, the bank is prepared to withstand the effect of a rate change to 5.25 lei per euro and not their is no need the support of the Romanian state, “The rating of Erste is significantly better than Romania” declared the Austrian magazine Profil. For its part Volksbank, third in the country, announces the opening of 15 new offices in 2009. Despite the good words, some nervousness is apparent. A group of ten banks operating in Eastern countries, including Erste, last December sent an application to the European Commission and the ECB requesting specific support to the region, of unknown size package to encrypt between 100 and 400 billion euros. In mid February, the Austrian finance minister Josef Pröll, encouraged by the banking sector, paid a visit to Croatia, Ukraine, Romania and Bulgaria to join their local counterparts to study the situation with the problem of liquidity and exchange rate stability as main points of the agenda. In Bucharest met mr. Pröll with the head of Bank of Romania Mr. Isarescu addition to the Finance Minister Mr Pogea. At the end of the trail Pröll said that banks need support in the form of cash and that local governments must ensure the stability of their currencies. Austrian opposition, disappointed with the results, has called the trip “round of talks completely empty commitments” and calling on the minister to “bring the reality of the situation on the table showing all the numbers in this banking crisis starts game 70% of our GDP. “
In recent years the Austrian banks have taken significant market share in Romania. Through the creation of new banks or financial institutions to buy existing groups such as Erste Bank, owner of Commercial Banks Romana (BCR), Bank Austria through Unicredit Tiriac Bank and Volksbank and Raiffeisen, with its subsidiaries same name, from the Alpine country controls much of the Romanian financial system. Austria opted for Romania not only for their good future prospects, but as a new market without competition from the big Western banks.
The Austrian bank has provided a currency that is palpable at all levels. Their presence has prompted it to increased competition benefits the end consumer, individual or company that has seen reduced the time needed in the efforts and costs decreased. Just compare an entity like the State Bank CEC (Casa Economii if Consemnatii), historical bank created in 1864 and until 2008 has provided electronic banking services of other banks in foreign hands. Similarly, the differences are noticeable among the latter. New banks, such as Volksbank have service entry much faster than those of existing banks bought by foreign capital but heavy structures and in many cases not too customer oriented.
But all of them, one way or another have been launched in recent years to lending based on the same principles we know in Spain: very high GDP growth, upward trend of house prices, increased consumption and all supported by foreign capital inflows, non-existent unemployment, remittances from migrants and promised manna from European funds. The Romanians, eager to increase their standard of living and consumption have been launched easy credit offered by financial institutions.
Berne – Two years before its 100th anniversary in 2012, the existence of the organization Pro Juventute is threatened. The largest organization working with children and young people in Switzerland presented Tuesday morning in Berne measures taken to save its services.
“We have adopted drastic measures to save the services offered by Pro Juventute in connection with the company,” he told the press the director of the Foundation, Stephan Oetiker. Further restructuring has already been adopted, the organization will intensify its public as well as political and economic circles.
Faces several years in the wholesale financial problems, the foundation still registered a deficit of 5.8 million francs in 2009. But consolidation measures taken are paying off: survival is now guaranteed at 50%, says Stephan Oetiker. By 2012, 100% must be achieved.
No state and not just stamps “This is a misunderstanding to believe that Juventute Pro is a state organization,” he said, because the organization depends on donations to 80%. Another misconception: Pro Juventute not only sells stamps. Thus, significant benefits could disappear just by lack of funds. Read the rest of this entry »
After the storm comes the calm. This is the same philosophy that you should have when you have economic problems. This is the vision or the signal you expect to be able to put your life in order. Many people focus on get out of debt without thinking also the reason because they have debts first. While you have a plan to stay afloat, you should also take into account the things you should do to make sure this does not happen again, and the first step is organization.
Organize your home
An extremely important step to take steps to a better future is to start by having a hosted environment. Simple things like cleaning your house, make a bed in the morning, put your desktop in order, etc. will help you clear your mind and concentrate on the tasks you perform.
Establish a plan
The financial goals is very important to bring order to your life. Goals give you purpose and help you establish a system of positive encouragement to move forward. Your goals should be realistic, easy to watch your progress, and always tries to see beyond the goal. You have to write down your goals on paper and take a thorough report of how they do so, this will help you know how you go.
Start a budget
The most important thing in the world of personal finance to move forward is to budget. This will help you remember when you can afford to get out of debt and save.