On last Monday, US government announced the long waiting recovery plan for banking sector who stuck with huge toxic assets. After the announcement major share markets responded very positively. But would this plan can bring the ultimate success. After the disclose of the plan, people are divided into two group. Some people find this plan as the right one when many others have doubt in their mind.
The main part of the plan is to develop a joint venture between government and private investors who will buy the toxic assets from banks. Through this it will help the banking sector to recover from those toxic assets. In this process the banking sector become more stable and will start to play their own role in healing the economy. On the other hand the joint venture will sell those assets at later time to generate some more profit.
People who have the doubt asked, how the government will decide the price of those toxic assets. If they pay little then ultimately banking sector have to resume a big lose. On the other hand if they pay more , then that will create lose for the general tax-payers.
Some experts also urged, whether the private investors will participate in this this program. Although US officials mentioned, they already received some response from the investors to participate in this program, but their is a big question on investors participation.
Many experts admitted, the participation of private investors will ultimately reduce the large risk of lose from the tax-payers shoulders.
President Obama expressed, he was very confident that his administration's new plan will help the banks to remove their toxic assets. But at the same time, he urges everybody to hold their patients as the total situation need some time to recover from the recession.
Mark Zandic, Chief Economist at Moody's Economy.com said the plan "has a good chance of success". He mentioned , participation of government is a very good indication for the ultimate success.
It need to be admitted that, today we are sitting in the very early stage to identify the success or failure of the proposed plan. But the first impression of the plan generated some positive indication of success in our mind.
The main part of the plan is to develop a joint venture between government and private investors who will buy the toxic assets from banks. Through this it will help the banking sector to recover from those toxic assets. In this process the banking sector become more stable and will start to play their own role in healing the economy. On the other hand the joint venture will sell those assets at later time to generate some more profit.
People who have the doubt asked, how the government will decide the price of those toxic assets. If they pay little then ultimately banking sector have to resume a big lose. On the other hand if they pay more , then that will create lose for the general tax-payers.
Some experts also urged, whether the private investors will participate in this this program. Although US officials mentioned, they already received some response from the investors to participate in this program, but their is a big question on investors participation.
Many experts admitted, the participation of private investors will ultimately reduce the large risk of lose from the tax-payers shoulders.
President Obama expressed, he was very confident that his administration's new plan will help the banks to remove their toxic assets. But at the same time, he urges everybody to hold their patients as the total situation need some time to recover from the recession.
Mark Zandic, Chief Economist at Moody's Economy.com said the plan "has a good chance of success". He mentioned , participation of government is a very good indication for the ultimate success.
It need to be admitted that, today we are sitting in the very early stage to identify the success or failure of the proposed plan. But the first impression of the plan generated some positive indication of success in our mind.
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