<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>CRISIS AT WALL STREET
</TR><!-- headline one : start --><TR>What happened, America?
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE United States has been a fervent champion of global human rights and security and its actions have run the gamut of options from criticising countries with less than stellar human-rights practices to imposing embargoes on rogue nations to fighting foreign wars. But what of financial responsibilities?
It is now time for the US to face up to its financial responsibility in an increasingly interwoven world. The US sub-prime crisis is an acute example of how reckless financial behaviour in US domestic markets can ripple globally. This is the financial equivalent of a tsunami effect.
Globally, central banks from Europe to China to Singapore have taken steps to contain the fallout by making credit available and pumping money into financial markets. All these interventions cost more money, big money from the respective governments. If the central banks do nothing, the crisis worsens. The world is being held hostage by the reckless behaviour of US financial institutions. As the drama over sub-prime continues, what is clear is this: The turmoil is a result of indiscriminate lending to property buyers in the US.
What is shocking is that supposedly highly professional financial institutions, with their armies of analysts and risk managers, possibly in their greed, could fail to recognise the risks and instead engage in even riskier behaviour, stacking up even more money instruments on the shaky foundation of sub-prime mortgages.
It also shows how money instruments have become so complicated that their underlying fundamentals are obscured. Alvin Tan
</TR><!-- headline one : start --><TR>What happened, America?
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE United States has been a fervent champion of global human rights and security and its actions have run the gamut of options from criticising countries with less than stellar human-rights practices to imposing embargoes on rogue nations to fighting foreign wars. But what of financial responsibilities?
It is now time for the US to face up to its financial responsibility in an increasingly interwoven world. The US sub-prime crisis is an acute example of how reckless financial behaviour in US domestic markets can ripple globally. This is the financial equivalent of a tsunami effect.
Globally, central banks from Europe to China to Singapore have taken steps to contain the fallout by making credit available and pumping money into financial markets. All these interventions cost more money, big money from the respective governments. If the central banks do nothing, the crisis worsens. The world is being held hostage by the reckless behaviour of US financial institutions. As the drama over sub-prime continues, what is clear is this: The turmoil is a result of indiscriminate lending to property buyers in the US.
What is shocking is that supposedly highly professional financial institutions, with their armies of analysts and risk managers, possibly in their greed, could fail to recognise the risks and instead engage in even riskier behaviour, stacking up even more money instruments on the shaky foundation of sub-prime mortgages.
It also shows how money instruments have become so complicated that their underlying fundamentals are obscured. Alvin Tan
