Leading Economist Says World Still Mired In Financial Crisis

inflationAn internationally renowned economist said on Wednesday that banks need to review their banking strategy following the global credit crunch, noting that the world has not yet recovered from the financial crisis.

“One look at banking is that banking is accepting credit and lending money,” said Souhail Elia, chairman of the ABC anti discrimination league in Nevada and chairman of Asian American leadership council for president Obama, speaking before a panel of Beirut’s top bankers and economic experts.
“To me, this is not the true definition of banking. To me, banking is the business of buying and selling money.”

Elia gave his speech at the Union of Arab Bankers building in Downtown Beirut. In pointed terms, he tackled the many of the most pressing economic issues of the day: The global financial crisis, inflation, and the future of the US dollar as an international currency.

In his opening statements, he asked his audiences to look be­yond the prospect of recovery. “Where are we now?” he asked. “There is a shortage of credit, loss of confidence, decrease of consumer spending … all these things we know. It is a financial crisis, in a nutshell.” These challenges can no longer be considered symptoms of a trend, he said, but must be viewed as realities and dealt with as such.”

A number of economists, in­cluding former US Federal Re­serve chief Benjamen Bernanke, have predicted that the world is now in recovery, he said. But Elia said a bottoming out” of the world economy is hardly  a cause for celebration.

“The absence of something is not the presence of something else,” he said. “The absence of war is not the presence of peace … The absence of backward movement does not mean you are going forward. It might mean you are stationary.” To have a true recovery, he said, will require a new approach to the financial system and a general restructuring of banking strategy. “We need two things,” he said. “First, we cannot have more toxic assets than productive assets.” Institutions cannot hold their ground when they are based on assets that are not allowing them to grow, he added.


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