| Topic : Govt measures for credit crisis |
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Finance & Accounts |
Banking & Insurance Professionals |
Investment Hub |
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Activity:
91 views;
last activity : 03 31 2011 10:23:21 +0000
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Increased Transparency
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Forcing Banks to Bear the Bailout Burden
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Mixed Economy Footage....
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Accounting Changes
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Govt should encourage consumers on bank deposits !!!
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Bring out the Black Money
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I feel one major problem with the current situation is that so many holders of mortgage-related securities got disconnected to the actual risk of the mortgages underlying them. One proposal is to improve transparency. That way, "no matter how this daisy chain goes, it will always be possible for you to drill down through the daisy chain to the very bottom where you know who the borrower is, and how much they owe, and you can figure out how it’s related to all the other borrowings."
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Exactly!!
The need is to make the monetary transactions more transparent to be aware of the direction & flow of money.
I agree this point.
Govt Should ask lenders to publish details of each and every single borrower (for secracy lender may not disclose telephone number, Interest rate and address). Details should be name (all directors and partners if company), amount lended and > 30 day outstanding if any. These details should be available on the internet and should be updated every 30 days. -- This will prevent excess lending to a paricular group/company and thus a future fraud.
If bank do not lend x% (Say 60%) of the deposits taken then they should be charged penalty. -- This will make sure that lending happens.
Govt should conduct surprise audits to check whether FIs are making proper disclosure. i.e. if x is taken a loan and his details is not uploaded on internet in 30 days then there should be a heavy penalty (say 10 times the loan amount) on the lender.
Same should be true for all deposits. Govt should make sure that account numbers are given serially. Every depositer should have unique identity number (say PAN number. If pan number not available then depositer should be given one number by bank which should link all his deposits and accound jointly or singly.) In case depositor do not have a PAN card, then he should be asked to give written diclaration of all his deposits in other baks every quarter. --- This will stop black money.
Govt should stop facility of joint account. -- This makes system simpler to monitor.
Plus there are certain fundamental things -
1. Every citizen must have a unique ID. All IDs like Driving lisence, PAN , Voter ID should be linked to this ID.
2. All income/deposits/loans/bank Accounts of indivisual/company should be agained linked to this ID.
3. This information should be available on net freely. And this info should be searchable so that just by entering this unique ID one should be able to see all details of the indivisual (For privacy we can hide some info like Date of Birth, Telephone number, address etc.).
Now,
Govt can give huge penalty to baks who do risky lending or excess lending. (i.e. if x is not having unique ID OR if x is having ID but ID shows that he was alreay a defaulter etc.-)
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My idea is government could buy mortgage-backed securities from the hard-hit banks at the securities’ face value—as an example, Rs 50000, even if their current market price is 3lakh. It would do so with the aim of selling them again when the markets have stabilized. But, the government would also "get a guarantee from sellers that they will make up any loss the government has on the sale of the securities," perhaps in the form of a tax giving the government "number-one priority debt claim on any of these firms
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Considering the status of our country as Mixed Economy system... we must encourage our home production at the same time opening options for their export to ensure the earning of maximum foreign currency..... this process on the one hand secure our economy against loans taken from abroad and on the other side ensuring jobs to our abundant hands those are not well educated but master in the hereditary artisans.... Of course, the idea is to examine our capitals those are non-performing or idle or blocked and must be turned into working capital at the earliest....... |
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I think banking sector must argue for suspending the current accounting methods for how the mortgage assets are valued, to ease the impact of limited liquidity. Banks must argue that "you would save the taxpayers a lot of money by suspending mark-to-market accounting and going to some other kind of intrinsic value accounting based on cash flows, not an arbitrary number that people can make up.", Let people value them just like they’ve valued other loans in times of stress.
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One should remember that spending more than we earn is how we got into this economic mess in the first place. There is a better way to get out of this mess than relying on a consumer-led recovery. The government should let and encourage consumers to put more of what they earn into their savings accounts and for banks to use this money for infrastructure and capital equipment investments which in turn will create jobs and then automatically encourage consumer spending......
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Govt. should trace the black money and bring it out in to economy.
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