Bank Markets

January 25th, 2013

Obama committed to the banking sector and fiscal order to generate confidence Buenos Aires, Argentina on February 24, 2009, yesterday saw a new turbulent day in the United States. And if it was stirred in US markets, it was also in world markets. The fear returned to take over the operations and is thus the markets continued breaking minimum. U.S. economic prospects continue to deteriorate. For The Economist Intelligence Unit (EIU), the American economy will suffer a contraction of its product on the order of 2.5% for 2009.

Without a doubt, this turns out to be a fact clearly indicative of the depth that has reached the crisis. As it could not be otherwise, Wall Street closed at their lowest level in 12 years to break the Dow Jones floor 7,200 points (with a low of 3.4 percent), closing at 7.114,78 units. The American banking sector once again became news. Rumors of nationalizations were the order of the day. One of the versions indicated a possible increase in the State participation in Citi (NYSE:c), which could reach 40%. Bank of America (NYSE:BAC), was also noted as a possible beneficiary of contributions from the U.S. Treasury.

In this context, the Citi shares ended the day with a rise of 9.74%, while those of Bank of America did a 3.17% up. But the U.S. Government has wanted to bring calm to markets ensuring that banks remain solid enough and have a sufficient capital base to not require public assistance. The U.S. Treasury has wanted to go further and not only rely on the solidity of the banking system of the United States.UU., but already thinking in the recovery of the same ability to generate credit. In this sense, the U.S. Government confirmed that it will give you the liquidity that the banking system needed to revive the credit markets during the crisis, in a signal of support amid a climate of growing instability in a joint statement from the Treasury Department, the Federal Reserve Read (EDF) and other government agencies in charge of the American economy: A strong financial system is necessary to facilitate a broad and sustainable economic recovery.

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