n Without Prejudice - Editor's note
|Article Title||Editor's note|
|© Publisher:||JetBlue Publishers (Pty) Ltd|
|Publication Date||Sep 2014|
Headline after headline this month has been of disappointing economic data. What began in August 2007 and became known as the American sub-prime crisis, evolved into a global credit crisis by the beginning of the fourth quarter of 2008. In September 2008 Nouriel Roubini observed, "Whenever there is a systemic banking crisis there is a need to recapitalise the banking/financial system to avoid an excessive and destructive credit contraction. But purchasing toxic/illiquid assets of the financial system is not the most effective and efficient way to recapitalise the banking system." He went on to observe that the Federal Bank and Treasury claim that spending $700bn of public money to recapitalise the banks was unjustified. Roubini saw the bailout of 'reckless bankers, lenders and investors' as doing little to reduce the debt burden of the millions of distressed home owners.
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