Economic Development and US Financial Stability Economic development in the United States is closely associated with the financial stability in the country and as a result, the control over the financial situation is the mission of the present Government of the United States and its Federal Reserve. To provide the financial security of the country, the Federal takes certain measures just not to repeat the situation of 2008. At that time, the economy of the United States appeared to be in a difficult situation as the Government appeared out of the game. A lot of financial institutions were not controlled by anybody and they could do whatever they wanted. They created suspicious financial institutions an offered other highest percent to be earned on the money deposited. It was rather unusual as they were not engaged in any activity that could provide them with such enormous earnings. As a result, when the economy started declining and people felt the need in financial asserts they started withdrawing their money leaving these institutions without any currency to function. As a result, most of them triggered the financial crisis as they appeared without money to repay to the customers. Now, all the financial sphere is under strict control of the Federal Reserve and regular stress tests are carried out to learn whether the banks and other financial institutions could overcome difficult financial situations. As a consequence of 2008, all the banks needed to increase the capitalization and to increase the volume of currency in case, the population would demand the deposited money. Trying to control the situation, all the financial institutions are checked for their legitimacy and now the Government does not let any institution act independently.
Posted on: Mon, 02 Dec 2013 13:11:29 +0000
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