Global bailout package size nears $2 trillion

NEW DELHI: With financial institutions falling prey one after another to the global credit crisis, the bailout packages announced by various governments across the globe are inching towards two trillion-dollar mark -- an amount nearly double the size of Indian economy.

With the US Congress giving nod to $700 billion aid for troubled financial institutions in the country, the US government alone has announced a total package worth about 990 billion dollars.

Besides, a handful of European countries have already announced packages worth a similar amount in efforts to save their troubled financial entities.

There are expectations for more such instances of helping hands coming from the governments in Europe as the crisis is said to be fast spreading in the region after a full-blown blast in the US.

However, nothing of this sort is expected in India as the country and its financial institutions have remained mostly insulated from any direct impact of the crisis.
Still, the collective bailout packages in the US and Europe, currently at about 1.8 trillion dollars, could soon be double the size of one trillion-dollar Indian economy.

India's GDP is estimated at Rs 46,93,602 crore for the latest fiscal 2007-08, which stands at just over USD one trillion based on the current exchange rate of about Rs 46.8 to a dollar.

From America to Europe, the deepening financial turmoil has seen the fall of big names, especially in the banking industry, such as the bankruptcy of Lehman Brothers, firesale of Merrill Lynch to Bank of America and the extension of 85 billion-dollar lifeline to AIG.








Readers Opinions
Global bailout package size nears $2 trillion
danendra jain , Agartala , says: I am of the opinion that financial crisis in USA and other parts of the world will definitely adversely add fuel to fire in already burning Indian banking system. Banks in India are building castles in the air by hiding the malady already crept into and eating away the intrinsic worth of banks just like cancer creates erosion in the body. Our banks show profit and growth by cooking figures and concealing real NPA (Non performing assets). Auditors, (either statutory or RBI) are simply certifying the books in return of gifts in cash and kind they get from bank managers. If banks truly and honestly classify their asset portfolio, there is no doubt that all PSU banks will find that their capital has already been lost and public money is in danger. How long RBI and Finance Minister will build pressure on them and force bankers to project and present rosy picture to earn false and fabricated image before international community. Days are not far when truth will be exposed and Indian banks will face more acute and devastating crisis.
[5 Oct, 2008 2124hrs IST]

via:Economic Times