How liquidity crisis can be tackled?

this is a opportunity for those who are having excess funds.

a)business buy outs

b) those running business need to be told to have enough funds to tackle slow downs,fall in sales.say having six months expenses tied up. or having a reserve which could take care of a fall in sales ..crdeit flow etc.

c) this is opportunity fo rbanks as a new area of concentration..providing liquidity at short intervals.

d)insurance companies can take it up as a business.

e)management consultant companies specialising in managing such situations could comeup call it business crisis managemnet team.

f)some times business die because of the head off institution moveing away.basically management vacum.

g) lack of trust..so if you see satyam episode the things changed when the trust in management was lost..and when the trust was brought back by way off a sell off

h) if you see the case of global trust bank..the trust was reinforced when obc took over the management within no time.the trust was restored and there was no run off.

i) when th ebanks in america were facing severe liquidity problem the take over of business of banks by government warded of a run on the companies.

so basically it is a management of crisis which could be management of resources/

management of trust..or having proper managemnet in place and a combination of so many things.

The global liquidity crunch has indirectly impacted the Indian money, debt and credit markets. The situation has caused immense uncertainty and lenders are loosing confidence in credit.

Indian regulators have understood the situation and responded. Reducing the CRR twice within a short duration besides 1% re-finance against SLR are good steps. Given the magnitude of the problem, the solution will lie in increasing liquidity substantially. Liquidity will help reduce the free fall in asset prices to some extent and more importantly jump start the credit disbursal which will have an immense impact on improving sentiment.