Skip to main content
No. of Recommendations: 1
It's been primarily a liquidity crisis that was created when the asset values were hard/impossible to measure. This resulted in capital impairment as loan loss reserves became impossible to determine. That created a need to de lever.

That produced a credit crunch, because the easiest way to de lever is not to put new money out. A viscous cycle developed where institutions didn't trust the safety and liquidity of other Banks. So, cash flows among banks and businesses stopped. That in turn cascaded and created more capital and liquidity problems.

It got very serious as you know. Before Trust and Confidence comes back, capital and liquidity have to be restored.

Why do we have to act? Because we are the country - we are the government. We are the final go to part of this equation. There is no - one else. And - the financial system is our field of play. A football team needs a field. We do also. The financial system is also like our veins and arteries - without them, we bleed out.

LANORTH!!









North Carolina National Bank(NCNB), which is now BoA, came to Texas in '89, where NCNB stood for 'No Cash For Nobody'
Print the post  

Announcements

This is a Politics Free Board
Politically charged posts are not permitted on the Metar Board. If you make a political post, and it is alerted, the post will be removed. Thanks!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.