martes, 31 de octubre de 2017

Extend and pretend | The Indian Express

Extend and pretend | The Indian Express

Extend and pretend

Banks can play that game no more. But recapitalisation is not the reform that is needed to prevent a recurrence

Written by Ila Patnaik | Published:October 31, 2017 12:05 am
Bank recapitalisation, BofAML, RBI, economic recovery, Bank of America Merrill Lynch, Business News, Latest Business News, Indian Express, Indian Express News
The problem of hidden bad assets is pervasive across the entire banking system. (Representational)
The problem of rising non-performing assets of banks has been simmering beneath the surface for many years. Until now, it was possible to sweep bad news under the carpet. But the pressure arising from bad loans going through the bankruptcy mechanism has made it difficult to continue the game of extend-and-pretend. Recapitalisation of banks is, however, not a reform. It uses taxpayer money to cover up the failure of institutions. To prevent a recurrence of such failure, it is important to reform not just governance, but also regulatory oversight.

No hay comentarios: