The global financial meltdown has forced six central banks to coordinate their efforts to ease the detrimental economic effects of the worst ever global financial collapse by lowering interest rates.
We are definitely living history in the making and as everyone is contemplating the next move after the absolute collapse of the investment banking model, the Federal Reserve, European Central bank, Bank of England, Bank of Canada and Swedenâ€™s Riksbank, all cut their benchmark rates by 50 basis points, or half a percentage point. The Bank of Japan, although it didnâ€™t participate in this joint effort said the move had its full support. Chinaâ€™s central bank also lowered its one-year lending rate by 27 basis points, in an independent move.
Liquidity is also pumped into the financial system by ventral banks around the world, and governments do not hesitate to nationalise any troubled financial institution to avoid any further seismic events with irreversible effects for the global economy.
The growing number of banks and other financial institutions that are not able to survive the ever deepening credit crunch is still sending shock waves throughout the world, and I am not only talking about the financial markets.
The current market conditions will certainly be referred to by generations to come as a key milestone, as companies and organisations are struggling to weather the storm that hammered their earnings down.