November 13, 2008
Obama + 6, Monday 10th, evening
“Are we at the end? Is it over?”. I am asking the most capable people in the supervisory institutions. I am of course talking about the financial crisis. One such looked at me and answered; “no it is not over, may be we are half way”. And then he told about the debt packages, the speculation, the fee structures, the irresponsible behaviour of the American financial markets. There is much more out there.
The highly leveraged corporate lending is among the next unsecured credit problems to be tackled. This is due to incredible debts that Private Equity managers have put on the companies they have bought in the past 5 or so years. All these companies are trying now to recapitalize their loans. But are running now into default because they can’t get new loans, or can’t afford them!
So, if anyone needed proof, Hedge Funds and Private Equity Leverage Buy Out are the part of the credit crunch financial crisis.
That is why a new regulation in Europe and US must cover all financial players – Banks, credit rating agencies, Insurance companies, pension funds – including Hedge Funds and Private Equity which until now have been outside normal regulation.
That was the first paragraph in my report to the European Parliament on regulation for the Financial Markets. I am pleased to see that American progressives are on the same track. Now, it is about implementation. We are not at the end. But we need to regulate now. This ultra free market financial world can not be allowed to create new crises for ordinary people – not in the US, not in Europe, not anywhere the world.Author : pesmanifesto