The credit crisis stemming from the US sub prime lending debacle is now just over a year old, and is still unravelling in spectacular style. Who would have thought that the crisis would claim (as victims) 3 of the USA's top six investment banks within the space of a few months. What will be the impact of Lehman Brothers's demise on their banking and insurance partners, and therefore on the economy as a whole later on? Will AIG now go the same way? These are difficult times indeed. The fact is that banks are hoarding cash and not lending to each other or to the general economy. Make no mistake, businesses in the wider economy will be impacted adversely, and that will mean that the man in the street will also feel the pain.
Banks used to be held in such high esteem, but I'm now wondering whether they'll ever be able to gain our confidence again. Let's not forget, all this came about through banks' irresponsible lending of our money to bad credit risks at a time when bankers thought that everything they touched turned to gold.
It should never be allowed to happen again.