India in the wake of the global financial crisis
Every person must be aware of the flaws in the global financial system, and how India is faring in such distressed hours. Honestly, not many of us are aware as to what exactly happened, what is actually happening and what will happen in the future.
The steps Brazil took last week for boosting the rise of its currency mirror the rising anxiety in several emerging economies regarding the inflows of hot cash.
Issues such as fickle deposits in banks and very old enablers of calamitous booms in credit must have much more attention. The time is ripe for preventing all the banks, including the depository institutions such as money market funds, from paying extra apart from the risk-free government bill rate. All in all, there is a need to cap the rates on all short-term deposits.
In the US interest rate ceilings were apparently consigned to history alongside the control of trucks and airlines, blown off by new and innovative money market funds and the deregulatory wave of the latter halves of 1970s and 1980s.
Banks had been compelled to pay market rates to depositors who had long been exploited, rather than giving away free toasters to draw the attention of custom.
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