Craig Fine, Esq., Strategy And An Outlook On Banking

Craig A. Fine, Esq. Banking On A Fragile System: The Potential Of A Global Bank Crisis

Are banks are failing? Is this what is expected ?  When money is more expensive than it was the last few years, companies, including the banks tighten up.  There is never enough money on hand to pay everyone's debt.  It’s somewhat of a Ponzi-type scheme where unless new money is coming in, all of the old money cannot be paid back.  Even the biggest banks can fail.  REITs throughout history restricted investors from withdrawing as their liquidity was not enough to pay everyone back in one shot.  The banks that are currently scrambling. Interest rates have gone through the roof, some banks are actually losing money.  Couple that with depositors looking to take money out, and the result may become another bank failure.

 

Law Office of Craig A. Fine

  

It is important to note that banks are not the only ones failing.  Credit unions, all types of lending institutions, investment firms, and even the federal government is seeing red ink.  It is a worldwide phenomenon, not just a regional or country phenomenon.  The number of people to be affected by the banking failures would be immeasurable.

 

The government is trying to do its part in trying to help the situation by providing bailouts, loan forgiveness programs, and other incentives to help keep the banks afloat.  The Federal Reserve is also in the mix, providing loans to banks to help them stay in business.  All of this, however, will not help if the underlying reasons for the bank failures are not addressed.

 

The underlying reason for the banks' failure is simple – their business model has failed.  They have been too aggressive in their investments and have not been taking risk mitigation into consideration.  Overextended with investments, adapting to new consumer trends, regulation and shareholder demand for profits, capital preservation took a back seat. The answer to this problem is not as simple as providing a bailout.  The government and financial institutions must take a long-term view and develop strategies that will help the banks become more financially stable.  Banks need to be more conservative in their investments, and they must take into account the long-term effects of their investments.  They must also make an effort to engage in more consumer-friendly practices, such as offering more competitive rates and terms.  This will ensure that the banks remain viable and can continue to provide services to their customers.

 

The banking industry has been around for centuries, but in the modern era, it has become more volatile and less reliable.  The current economic environment and banking crisis is a reminder of the need to have a more secure and stable banking system. Banks must make a serious effort to build relationships with their depositors and customers, and they must be more prudent in their investments.  Only then can the banks continue to remain a stable source of financial security for individuals, businesses, and governments.

Craig A. Fine, Esq. is a graduate of New York Law School.  Before founding his own law firm, Mr. Fine practiced with a highly regarded firm in Manhattan.  In 2007, he then established his private practice in Staten Island and New York City, New Jersey and Florida with a concentration on real estate.  

 

 Articles about Craig A. Fine, Esq.

• Residential Real Estate Closings
  
• Commercial Real Estate Closings
• Deed Transfers
• Refinance Representation
• Settlement Agent
• Lease Preparation & Review
• 1031 Exchanges
• Easement Creation & Termination
• Contractor Representation
• Condominium Representation
• Co-op Representation