After 3 weeks ago the financial markets in some countries had fallen, the market rose again after the Government of Abu Dhabi, Dubai's neighbor, says ready to help banking liquidity crisis of Dubai World. Dubai Government then declared, which restructured its debt payment schedule is only 26 billion dollars so that financial markets become more relieved.
In crisis situations, which should be handled first by the banking authority is the owner of the psychological problems of funds, investors, and depositors. In a panic situation, a small bank collapse could cause a crisis of confidence in the banking system. Example, the Bank of England at the beginning of the sub-prime credit crisis, September 2007, was forced to inject "small banks", Northern Rock, for 3 billion pounds. Since the crisis continues, in January 2008, injection was already reached 26 billion pounds.
Having settled the problem of Dubai, the financial markets late last week showed optimism returned by the global economic recovery of data. However, the U.S. government debt rose sharply with the low interest rate (0.25 percent) to make investments in the U.S. is not attractive. Investors also moved the short-term funds to developing countries and commodity markets.
In crisis situations, which should be handled first by the banking authority is the owner of the psychological problems of funds, investors, and depositors. In a panic situation, a small bank collapse could cause a crisis of confidence in the banking system. Example, the Bank of England at the beginning of the sub-prime credit crisis, September 2007, was forced to inject "small banks", Northern Rock, for 3 billion pounds. Since the crisis continues, in January 2008, injection was already reached 26 billion pounds.
Having settled the problem of Dubai, the financial markets late last week showed optimism returned by the global economic recovery of data. However, the U.S. government debt rose sharply with the low interest rate (0.25 percent) to make investments in the U.S. is not attractive. Investors also moved the short-term funds to developing countries and commodity markets.