Banking Industry - How Stable Is It? The recent economic crisis shook the financial world and alerted us to several ways in which the entire system needs to be propped up. Along with the banks and other economic institutions being guilty of over exposing themselves to bad debts, it showed that the banking system is a lot more fragile than was previously considered. With toxic loans spiraling out of control, the banks became reluctant to release r money into the economic system, generating a credit crisis. The people who had the money were no longer willing to grant loans and many who were dependant on credit to operate found themselves without the working capital that they needed. The toxic loans that financial establishments were exposed to were just too much for some and a few banks even found themselves being bailed out with massive government packages, or going out of business completely. In addition to the high street banks suffering, iinvestment nvestment bankers were also hit by a sinking stock market as investors looked to cash out their holdings. Coupled with scandals and the revelation of unethical dealings, the entire system was close to collapse as the public lost confidence. Much has changed ed ever since the initial crisis. Financial establishments are now under much tighter regulations regarding how they operate and increased requirements are needed to now qualify for a loan. This would mean that fewer people can qualify for a loan, but this would assist in safeguarding the system as a whole. This is not to say that the crisis is over yet. Many individual home owners are still affected by a weak economy and more foreclosures are yet to enter the system. Too many foreclosures would mean anot another her recession but government incentives are helping to prevent a slump that's too large to handle.
Moreover, some of the larger European economies like Spain and Portugal are suffering very badly and the exposure of US banking companies in the European continent ontinent could be a major cause for concern if things donâ€™t improve there. Just recently Fitch ratings, an organization that is held in high regard by individuals throughout the finance industry, has rated the American banking industry as stable, if slow. With the government currently overlooking the banking system much more vigilantly to ensure that past mistakes of old aren't repeated, whilst injecting stimulus incentives into the market, it'd appear as though there's now a greater emphasis on ensuring tthat hat everything is done properly in order to better protect individuals and the economy from any weaknesses that the banking system might have. As is to be expected, the earnings and revenues of banks are down from before the crisis occurred however they aare increasing again.