MISCELLANEOUS COMMENTS ABOUT THE FINANCIAL CRISIS, REAL ESTATE, MORTGAGES AND OTHER RAMBLINGS



Tuesday, March 1, 2011

Why We Remain Financially At Risk...

You would think that after the TARP funds were distributed to all of the major banks, and then returned to tax payers shortly thereafter - that the U.S. would be somewhat solvent as far as lending institutions go...

Well, according to the economists at New York University's Stern School of Business - not so fast.

With the help of Nobel Prize winner Robert Engle, the university has developed it's own model on how to measure if a financial institution is systemically "risky".

There is a somewhat sophisticated mixture of financial benchmarks used in order to determine the risk level, but it basically shows that the largest lending institutions would possibly need the same infusion of cash and tax payer backed funds if the financial events of 2008 repeated itself any time in the near future.

But it is not fair to place all financial institutions in the same boat. Just like any other sector in business, some lenders just do things different than their competition. In this case, bigger can be better, if it's done correctly.

I do not know how the large institutions can become less risky, since risk is the game they play. But it appears that you can be in the risk game, and not be risky at all...

Want to know more ? Visit the site with the results, Vlab.Stern.edu and read the findings and other information concerning the riskiest financial institutions in the U.S today.

I would like to thank Bloomberg Businessweek magazine for presenting this article. It is the Feb.7th - Feb.13th 2011 edition of the weekly magazine. The article is located on Page 39, and is written by Craig Torres. Good information to know, Craig...Thank You

3 comments:

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    1. Financial risk is an umbrella term for multiple types of risk associated with financing, including financial transactions that include company loans.Its sure the large institutions can become less risky, since risk is the game they play.

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