Grinspen the Former head of Federal reserve system (FRS) warns
about threat of distribution of crisis
the USA Alan Grinspen draws a gloomy picture, naming present crisis of liquidity by event of century. In opinion g - on Grinspena, the situation is so serious that the further bankruptcies of banks are possible. “ it is not excluded that variety of banks and the financial institutions, which existence under the threat from - for insolvency, will be rescued by the governments “ - Alan Grinspen in article for Financial Times has written.
former head FRS holding the post more of 18 years, named proceeding credit crisis “ the event, happening one or two times for a century, deeply taken root in fears before insolvency of many financial institutions “. Alan Grinspen has connected so negative estimation that to the governments was necessary to support recently bank sector actively. “ At first credits from the state have arrived into the account of private banks instead of private credits, then a case with the British bank Northern Rock, and then in the USA with Bear Stearns and then in the markets visibility of stability " has been again created; - Alan Grinspen has noticed. In its opinion, on it the role of the governments in rescue of financial institutions will not come to the end, as threat of crisis of liquidity remains.
G - n Grinspen believes that crisis “ has not ended only thanks to that Central Banks have started huge portions of short-term liquidity “. He is assured that stronger regulation will not lead to an exit of economy from a difficult situation. “ the regulation which is the obvious decision for today`s crisis, in the history was never capable to liquidate financial crises “ - Alan Grinspen writes. In its opinion, there is a danger of that some governments frightened of inflation, can try to strengthen pressure upon economy again. “ if it is extended, globalisation can be rejected back - the awful price “ - the financial guru warns.
Alan Grinspen has explained that only stabilisation of the prices for real estate in the USA can lead to the termination of crisis of liquidity. Habitation cost will return to normal frameworks only when considerable excess of the offer over the demand, arisen of - for boom in the real estate market, will even more decrease.
under the direction of g - on Grinspena FRS the USA after acts of terrorism on September, 11th for the purpose of stimulation of economic growth pursued a policy of cheap money, having lowered for 2001 discount rate with 6,5 to 1,75 %, and in June, 2003 discount rate has reached a record minimum - 1 %. Thanks to so low rate many citizens with low level of incomes have typed credits, including mortgage which all became cheaper. Further FRS gradually raised discount rate therefore borrowers have got to a percentage vice and could not pay off under credits. Critics of a policy of Alan Grinspena believe, what exactly it has led to present financial crisis.