Credit for an Idea

Financial Institutions, in the aftermath of the global financial crisis and the current lack of consumer confidence due to uncertainty both on the job front and as to the direction of interest rates, are finding it difficult to lend. So where would an entrepreneur, a community business or a manufacturer access credit to win market share and expand to create more jobs, certainly not traditional commercial banks. A deposit taking, consumer lending bank is not in the risk taking business. Net Worth, for loan security or guarantees, and reducing the provision for bad debts on their balance sheet is more important than analyzing any business ideas.

Private Equity

Bankers worldwide, faced with a growing public and political support for the inevitable separation of their conservative retail banking business from some of their higher risk merchant and investment operations, since the sub-prime mortgage crisis and the subsequent bank losses and failures, are testing business models that would maintain their profitability as well as meet the newly proposed legal or regulatory rules. One such proven model is Private Equity business.

A high risk, high return model which can and for all intents and purposes is needed to, within the new rules, invest in large scale development projects and ongoing business operations, that can independently raise debt financing from the surviving retail banks. With these new retail banks not being allowed to own a majority stake in any type of business, Private Equity allows the new bank to, with their own reserves, partner with high net worth individuals or other corporations, who would have been past customers of their merchant and investment banking operations, to equally invest as initial contributors. Hence, the new bank maintains its high return portion of its portfolio that is so important toward pleasing shareholders and competing for large deposits.

Personal Planning

Every parent must teach their children to take care of themselves; stay healthy by eating nutritious meals on time, be security conscious, be productive, copy and guardedly protect their important documents and prioritize tasks needed to accomplish preset goals. Setting goals and listing the necessary tasks will drive decisions and avoid emergencies (unscheduled responsibilities). It is therefore these decisions (description of each task, activity and reference to other related tasks) that must be structured by category, by date and time and financial amount, in order of importance.

Financial Products

Everyone has criticized financial institutions for be too conservative or taking on to much risk. What one needs to understand is that a particular financial institution through their range of products is deliberately designed to be conservative or progressive high risk takers. Any financial crisis is therefore based first and foremost on miscommunication more than any clever misuse of funds and this is clearly a failure of regulators to protect the sector.