Federal Reserve - financial crisis - Stock Exchange
Standard and Poor's chief economist talks about finance's future
Friday 19 September 2008
Lehman Brothers filed for bankruptcy, the Fed rescued AIG, Goldman Sachs and Morgan Stanley became bank- holding companies. Raphael Kahane askS David WYSS, chief economist at Standard & Poor's what lies ahead on Wall Street.
Wall Street has had yet another crazy week. But this time, the financial crisis has spiraled out of control. It's not just Fannie Mae and Freddie Mac. The Fed has had to rescue AIG, the world's largest insurance company, to save it from bankruptcy. The US Federal Reserve approved applications on Sunday from Goldman Sachs and Morgan Stanley to become bank holding companies.
This comes after Lehman Brothers filed for bankruptcy protection, and Bank of America moved to acquire Merrill Lynch.
Governments have tried to step up to the plate with a degree of intervention not seen since the Great Depression. Central banks are injecting massive amounts of cash to try to resolve the lending crisis that has plagued banks.
A year after the beginning of the sub-prime meltdown, the world economy is now entering into the next stage of the credit crisis, one that could potentially be more problematic than what we have seen over the past year.
To understand how we got to this point and what lies ahead, Raphael Kahane is joined form New York by David WYSS. He is the chief economist at the credit ratings agency Standard & Poor's.
Watch the interview by clicking 'Play Video' above.
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