“When US President-elect Barack Obama takes office in January, the crisis will only get worse,” Kumar said in a speech to the Ahmedabad Management Association today on the current financial crisis and future lessons.
“The 150 150 billion tax cut package for the housing sector was too short and too late to prevent a much larger collapse,” Kumar said, adding that “every aspect of the financial sector has fallen into financial instability.”
“Over the past two decades, U.S. financial markets have been deregulated, under the direction of Alan Greenspan, he worked on the idea that markets were becoming self-stabilizing, but in recent evidence Greenspan has acknowledged that he has been wrong for 16 years,” Kumar was quoted as saying. US leading daily.
This lack of control led to the collapse of Lehman Brothers, Bear Stern and other troubled organizations, he added.
“The government has intervened, the crisis has subsided, but now there is a crisis of confidence among the banks. The financial and financial markets operate on a certain level of trust and confidence and it should not be broken at any cost,” he added.
“The collapse in the United States was so intense in contrast to the slow growth that banks were bound by contracts. Deregulation had the instrument of promising much higher returns and even triggered a marginal fall in asset prices,” said Arun Kumar.
The U.S. economy was recovering from borrowing funds, so post-crisis countries such as Japan, China, Iceland, Ukraine, and others are in deep trouble. China is looking for ways to delink from the dollar as corporate profits begin to decline, Arun Kumar said.
Now that the security of the economy is on the rise due to lack of confidence, it is also dangerous, he warned. So if US President-elect Barack Obama joins the office, he will prioritize job creation in sectors such as BPOs and call centers, Kumar said, adding that the United States has lost 1.5 billion jobs in the past.
So at this historic juncture, the খ 600 trillion financial sector needs an out-of-the-box restoration, he added.
Against the backdrop of such a situation, the G-20 initiative is important and there should be a comprehensive coordination between the governments, including the Indians, Kumar added.