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dearborn federal credit union
Bank losses are like death wishes. If you are a proprietor, who relies business funding on bank loans, starvation days may not be far out. Bank losses pilot a crisis called credit crunch that eats up your investments, freezes your financing accounts, and leads you to bankruptcy at times.
The predilection that was not predicted, American banks leading massive losses, has created a hurly burly in the financial markets all over the world. American banks like the Citigroup, Wachovia, and Bank of America have all announced disturbing billion dollars of losses. That is why concerned investors have argued if breaking up the financial conglomeration system would help save the industry; and they were right about the concept. Similar damaging losses have resulted to Europes UBS AG : Swiss Bank Corp. and Union Bank of Switzerland : into settling for a break-up in their business model. Other banks, who have declared similar and major financial outbreak, were Japanese banks, Australian banks, British banks, and German banks. Japanese banks were the Long-Term Credit Bank, Industrial Bank of Japan Ltd., and Sanwa Bank Ltd. A British bank has also made a history-breaking loss, the Royal Bank of Scotland.
How have bank losses and credit crunch affected the world economy then? Well, let me start by telling you that, if a credit crunch occurs, there is an immediate shortage of cash flow or funding for loans and investments. Meanwhile, retail sales and even the job front have remained unscarred and gained positive results. Whilst everyone associated with the economy of US have experienced successive blows in their financial markets, those countries that did not have any relevant economic relation with the US, like Morocco and India, have acquired protection from the crisis.