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Archive for the ‘Financial Stability’ Category

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The best way to feel confident in the economic or financial stability to be able to feel more confident then go for everything you get financial freedom. Should always be taken with seriousness and consistency of methods and techniques that are taught about business, micro and make money.

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- No doubt this is what we do for the sole reason that the teacher tells us Robert Kiyosaki does not tell us never to leave our employment or work overnight (in any case we should leave it alone if we save to live for a year still do not receive any income at all this year, only then can you do that and yet still not recommended). Meanwhile you learn to build businesses , to experience and educated in the financial field. Then it will become more skilled and able to succeed in Quadrant “D” – Business Owner.

- And generally to feel more confident and secure in the financial sphere is precisely this form or method, which involves working not only in one quadrant of the flow of money but in more than one, so our income sources are diversified but focus our efforts and remain almost the same level as if we were working in one quadrant.

To get more information do not delay in asking, here we can answer your questions and problems, as long as you use the comments section with respect and restraint with regard to issues related to finance and business.

April has never been a cruel month for banking. But public debt in Europe, USA and Japan has become the main threat to the world economy, increasing the risk of falling into a new financial storm. The danger of entering a new phase of the crisis in the coming months is latent. Even the IMF has issued a warning in its Global Financial Stability Report, noting the vulnerability that are the balances of government. This is a situation that tightens and squeezes all the credit facilities, as highlighted in hand with the report of the Bank for International Settlements.

Europe is at the epicenter of the bustle, the recent turmoil in the wake of the Greek debt (mainly German banks) are a sign of weakness in the system and illegitimate pressures on public finances. Governments were not prepared for a emergency of this magnitude, and the IMF never realized the deadly trap that cooked the financial system. They swallowed the story that the unsustainable debt path would find its own adjustment mechanism.

But since the early 80′s, the debt has not only increased, increase, and increase steadily. As a counterpart, while the needs of governments have tended to be higher (for the aid and subsidies to businesses and unemployment) government revenues have gone down by the flattening economy overdrawn by the fall in housing prices and tax evasion by the instinctive generated by the setback. So it turns out that the treasury are on the brink of insolvency. And that triggers fear, late of course, the IMF, an institution as an accomplice of the crisis and the Fed, the Treasury and Goldman Sachs.

The current tensions in the economy are the product of $ 5 billion (May 1 with twelve zeros) that should refinance banks between May and June. When living normal times, both the irrationality and excess of confidence that the economy became, allowing faster settling agreements. But when budgets and tempers are starving, the entire system goes crazy in his own alienation. Even the IMF with its adjustment plan. Greece was the first victim of this pandemic. Still missing: cruel months ahead for the bank .

Following the latest crisis, has gained increasing prominence Financial Stability Report which draws up every six months, the IMF, the best tool to analyze the situation of the international financial system.

This week has just published the latest issue which highlights the two-speed economic recovery poses different challenges for policy action. In advanced countries the main task lies in reorienting policies to focus less on macroeconomic support and the provision of liquidity and more structural aspects. In emerging markets, the task is to limit overheating of the economy and the buildup of vulnerabilities.

In the short term, the challenge is raising funds by banks and sovereign states, particularly in some vulnerable countries in the euro zone. Globally, the maturities of financial institutions over the next two years are at $ 3.6 trillion.

Policies to achieve fiscal consolidation and strengthening bank balance sheets must be supported by credible mechanisms that do not burden the public finances back or financing from banks. In general, despite the transfer of risks from private to public sector, has not yet regained confidence in the banking systems of many advanced economies, a fact that has interacted negatively with sovereign risks in the euro zone.

To restore confidence and reduce excessive dependence on central bank financing through the need to strengthen balance sheets in the euro zone. The countries whose banking systems are still in difficulty must improve transparency (by conducting stress tests more stringent and realistic), recapitalize and restructure. Without these reforms, the difficulties of short-term financing can worsen and lead to other systemic liquidity crisis. Therefore, the report again to show that one of the lessons of the latest crisis is that financial stability will be a priority objective of economic policy. One thing that is sure going to write much now.

Financial stability plays a key role in the financial system and the overall economy, as shown in the current crisis. With the increasing number of financial institutions operating in one or several countries or continents, global financial stability has gained even greater importance.

The financial system consists of:
financial markets , such as money and capital markets that channel the excess liquidity of the lenders, ie, companies or individuals wishing to invest their funds to borrowers, or those who need capital;
financial intermediaries such as banks and insurance companies, which together indirectly to lenders and borrowers, but borrowers can also get funds directly in financial markets by issuing securities such as stocks and bonds, for example ;
financial infrastructure that allows the transfer of payments and securities trading, clearing and settlement.
To protect the system and ensure the financial stability it is necessary to determine the main sources of risk and vulnerability and to report to all stakeholders, for example, financial institutions and supervisors.

Most frequent risks
The slowdown in the economy increases the difficulties of companies to repay their loans (due to decreased sales) or households to repay their mortgages (because of unemployment), so that the banks may record losses.
The prices of assets (securities, land, buildings or equipment) are reduced or vary sharply, creating uncertainty in financial markets and causing losses to investors. Read the rest of this entry »

A day after its creation, the Council of Financial System Stability perform its functions only with the resources authorized by each of its authorities, prescribed in the agreement published by the Ministry of Finance in the Official Journal of the Federation (DOF).

Given these guidelines, the council will not have additional budget allocations, the structure will consist of nine members, among which are: the Secretary of the Ministry of Finance, Undersecretary of the same unit, the Chairs of the National Banking and Securities the National Insurance and Finance and the National System for Retirement Savings.

In this way, the board will be chaired by Ernesto Cordero, Secretary of the Treasury, and in his absence will be Agustin Carstens, Governor of the Bank of Mexico (Banxico).

Meetings should be quarterly, although special meetings may be convened only by the president or three members, also an annual report should be published, which will specify the state of the country’s financial stability and activities in this regard.

The council will have a Technical Committee to prepare proposals and recommendations on risks to financial stability for resolving crisis situations.

At this, the Technical Committee, to obtain economic and financial information required for the analysis and evaluation, it must be sought from the financial authorities. Read the rest of this entry »

The Finance Minister Vicente Bengoa, announced tonight that in the coming days, the Government submitted to Congress for consideration, two draft amendments to various laws, especially the 112-01 on hydrocarbons, text indicating that every three months be indexed for inflation taxes to be levied on gasoline, not applied since 2007.

Mr. Vicente Bengoa said that the inflation indexing was not before when oil prices reached astronomical figures, and that have materialized this the price of gasoline would have exceeded the 250 dollars a gallon, and would have caused an untenable situation.

He noted that business for a long time raised that the country should reach an agreement with the International Monetary Fund (IMF) as a way of disciplining the economy, which also advocated the opposition parties.

Highlighted in this sense that this understanding was reached with the IMF, including in the same article, the number six, which stipulated several provisions, including modifying the Hydrocarbons Law, to be applied to the indexing of fuel tax for inflation.

He said also the agreement with the IMF requires to be removed a number of incentives that are meaningful and which is conducive to many firms, incentives that will eventually disappear, Bengoa said in his speech addressed to the entire nation. Read the rest of this entry »