Just a year back, big banks and financial institutions had defaulted big time in many developed nations, especially in the US. Declaring themselves bankrupt overnight, these big financial institutions reported losses in billions of dollars on what we now know as sub prime crisis. So huge were the losses that US Government alone injected more than $700 billion to resuscitate these dying financial institutions. Honest tax payers’ money has been squandered to revive failed private US banks in one of the most aggressively capitalist nations of the world. Reason – these banks were too big to be allowed to fail. On the other hand, in 2009 alone 106 US banks had to close down, but they were not bailed out by US Fed. Reason – they were not big enough to be saved.
So what is the lesson to be learnt from here? Lesson is that as a business institution … Read More