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What the world's big guns say about the meltdown
October 17, 2008
I can say with certainty that if investment banks were still private partnerships, where the partners have all their personal capital at risk, the financial meltdown would never happen. They would not let another Lloyds of London capital call happen, ever: Mark Cuban, US billionaire
The financial tsunami we now face is a global crisis. Its destructive force is much stronger and more widespread than the Asian financial turmoil in 1997. The recovery will take longer, be more difficult and certainly cannot be taken lightly: Donald Tsang, chief executive, Hong Kong
What is the nature of the crisis? The details can be insanely complex, but the basics are fairly simple. The bursting of the housing bubble has led to large losses for anyone who bought assets backed by mortgage payments; these losses have left many financial institutions with too much debt and too little capital to provide the credit the economy needs; troubled financial institutions have tried to meet their debts and increase their capital by selling assets, but this has driven asset prices down, reducing their capital even further: Economic Nobel laureate Paul Krugman
What we needed and didn't have two or three weeks ago was a good diagnostic of the problem: It was not a liquidity problem; it was a solvency problem. And once you start from that position, the British solution is the only way forward: Philippe Martin, professor of economics, the Sorbonne, Paris
I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention. I believe companies that make bad decisions should be allowed to go out of business. Under normal circumstances, I would have followed this course, but these are not normal circumstances: George W Bush, President, US
Image: Economics Nobel laureate and Princeton Professor Paul Krugman. | Photograph: Jeff Zelevansky/Getty Images
Also read: What is subprime crisis? How it caused financial mayhem?
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