View Single Post
  #387  
Old 09.10.2008, 18:16
Goldtop's Avatar
Goldtop Goldtop is offline
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,847
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: How Safe is UBS

Quote:
View Post
So how do these rate changes stimulate the economy; the owners of large institutions (like UBS - must stay on topic) just buy more cigars - it does not make them safer?

Marton
The intention is not to make UBS or other bank safer. The intention is to encourage the banks to lend money to businesses.

The prevalent credit crunch means that banks are very hesitant to lend. Consequently, businesses cannot invest, finance projects, etc. So the economy would stagnate because money -- the lifeblood -- is not flowing. That is the theory.

In practice, banks might have other lucrative ideas, e.g. speculating on oil prices or some other wonderful idea.
Reply With Quote