Tackling bank crisis given utmost priority by President Obama

New U.S. president Mr. Barack Obama's newly designed and reinforced financial team of experts, ander the direction and supervision of Obama, pores and ponders over several options to tackle the financial crisis. This has raised panic about the financial health of leading banks around the world.
A brief, but authentic and updated account of the possible measures to be taken by Obama administration to resolve the crisis of banking sector is given below:

BAD BANKS
U.S. government led by Obama now plans to create one or more "bad" banks to hold all the toxic mortgage-based and other hard-to-sell assets worth hundreds of billions of dollars which are acquired from commercial banks. Those who support this idea argue that commercial banks relieved of toxic, useless assets would become more acceptable to potential investors. They can also resume business lending to companies and investors & thus, help to avoid the risk of a long recession.
Last year when the U.S. government first came up with a similar kind of plan, one challenge had been observed: how to settle on prices for directly purchasing all the assets from banks? If those had been bought too cheaply, perhaps the banks would have to report more losses; that would, in turn, threaten their financial health once again. And paying too much to buy them would waste the money of all taxpayers.

The potentially huge amount of money required to fund such an operation is another problem. All the investors including the central banks of China and Japan finance America's financial deficits by buying the bonds; they need to be assured and feel confident about its public finances. Mr. Obama's team could also place the bad assets with existing specialized managers of private funds.

LOSS GUARANTEES
New administration of Obama has already given the promise to guarantee potential losses faced by some of the biggest U.S. banks which could yet be incurred by their bad assets. In the month of November, the U.S. Treasury helped give guarantee up to an amount of $306 billion in risky assets held by Citigroup, for example. But it may be a more complicated process to set up these loan guarantees on a case-by-case basis than even establishing a bad bank.

Some economists are even saying that when it comes to assuring these investors that fast action is being taken to go to the root of the crisis and resolve it, these new loss guarantees do not work much.

NATIONALIZE ALL THESE BANKS?
The U.S. government is already an important shareholder in some leading banks, like- Citigroup. But according to some investors, it may undertake them completely; it may even effectively nationalize their bad loans.
There is a high chance that Mr. Obama's team would use its influence as a powerful shareholder in banks to press them to lend more amount of money.

Time of new president Obama: time to tackle U.S. crisis

20th jan, tuesday 2009, day of Barack Hussein Obama's inauguration as America's first black president became one of the most historic days in American history. And, most glorious day for black Americans. Under a bright sunny sky, Obama, a constitutional lawyer and one of America's most educated politicians took his place as the 44th president of U.S.
Soon after the inauguration, in his first inaugural address to nation Mr. Obama assured every american that he is now all set to tackle the present situation of crisis and unstability. He called for fresh hope amid the cold fear of recession, job loss, middle east problem and healthcare hazard looming large over U.S. But, at the same time he also made it clear that all these socio-economic and political ills of U.S.are the consequence of greed, but also of "our collective failure to make hard choices".

Obama has been inaugurated amid high expectations of the people…..and highest extent of financial, political, infrastructural, educational and medical troubles and challenges. Perhaps no other president in US history has come to shoulder the charges at a more critical time for entire U.S. He himself is pretty aware of that, so from today itself he moves to start chalking out plans and policies. The following goals he has set to save the nation:
1) rescuing the economy
2) charting a new course for the Iraq and Afghanistan wars
3) shaping his approach to the Middle East conflict.
4) Improving the quality of education of all levels and that of healthcare services.

Obama has pledged prompt and swift action to beat this economic crisis since the Great Depression. Obama now seeks fresh and effective approaches to repair the battered financial system and rescue it from a sudden-disruption. He and his team of employees are developing a series of ideas for that. Those includes the creation of a government run bank which would buy up toxic assets from seek and trouble-stricken U.S. banks. This aims to rekindle the steady flow of credit to the economy, so that businesses and customers can get access to loans. He will also be considering declaration of a $825 billion fiscal stimulus package to give a boost to the economy. With this purpose he will meet with his economic advisers.

In addition to all these economic summits and discussions, Obama will also sit down with top military officials to discuss the war situation in Iraq and Afghanistan and to set the strategies and plans to be taken to resolve the middle east conflict. No doubt middle east will hold the place of top most priority in Obama’s activities and Iraq and Afghanistan will surely Obama's foreign policy agenda. But his role will also be active enough to try to resolve the Israeli-Palestinian conflict.
According to reports, he takes initiative to name a Middle East envoy. For that job he considers George Mitchell, a former U.S. senator. He said that he will prefer a timetable of 16-month for the withdrawal of U.S. military troops from Iraq.