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Is auction a solution for US bailout?

Created by : Pankaj Gautam, Client Servicing/Key Account Manager, ICICI Bank  | 09 25 2008 12:47:08 +0000
Industry : Banking
Keywords : Solution Auction Us Bailout
Activity:  334 views;  last activity : 07 06 2010 20:18:09 +0000

The US government may have little choice but to use an auction process to price up to $700 billion of toxic mortgage debt it is buying from financial institutions, even if the formula has its snags. So let’s discuss how these things will shape up.

 

  
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An auction process would make sense, because it would allow the banks with the best information about the securities to determine the price that has set up auctions for governments globally. But competition among sellers would prevent banks from setting too high a price. I think this is the only and best option available to resolve the crisis now.
By Pankaj Gautam, Client Servicing/Key Account Manager, ICICI Bank  09 25 2008 12:47:08 +0000
 
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I agree with the views expressed by Pankaj
By SEKHAR REDDY, Training Manager, Union Bank of India  | 10 04 2008 10:51:48 +0000
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There appears to be no better solution than auction to bail out these financial institutions.
By Bhuneshwar Ram Tripathi, Head/VP/GM-Production/Manufacturing, Bhatia International Ltd.  | 10 01 2008 06:23:27 +0000
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This rescue plan should help restore confidence to financial markets. Banks and other financial institutions faced with going will gain a lifeline that should allow them to start making/giving loans again.
By Mohit Sethi, Account Manager, ABN Amro  | 09 29 2008 10:50:39 +0000
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us might cn utilise some other to come out from this type of problem might be its top bureaocrat might be thinking to resolve these type of problem
By MUKESH RAAT, B.B.A student, jims  | 04 22 2010 16:31:30 +0000
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why should we discuss about the u.s instead think and make strategic planning to safe guard our country against the possible economic hazards.
By anup.m.k. , QA/QC Manager, cameron international  | 10 11 2008 02:10:58 +0000
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I definitely feel there are drawbacks. A reverse descending clock auction would work best for securities held by multiple banks, but not as well for securities that are owned by just one or two institutions. In that case, there would be less competition to sell. The price might be higher than the assets end up being worth, costing the government money. I know the extremity of the situation but still the Govt should come out with something else to benefit all the parties involved.


By Omkar Bapat, Client Servicing/Key Account Manager, HDFC Bank  | 09 25 2008 12:48:56 +0000
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