In 2003 and 2004, accounting irregularities in mortgage finance companies Fannie Mae and Freddie Mac grabbed the attention of every one in the world. The failure of Northern Rock in UK has shaken the public confidence in financial markets.Sub prime lending killed many homes dreams in US and UK. Global recession has turned many financial institutions and programmes in doldrums. Stability in the financial market is lost. Investors have become shaky about hazy dealing from financial institutions.
If the private sectors are to rebuild that confidence and trust, they must have transparency, respect and integrity. They must be central to the development of a successful and trustworthy brand in financial services. These values need to be introduced at the macro level. Sufficient confidence has to be built among customers that the banks have quality capital and that they can absorb the losses incurred in course of operation. Insurers must have the capacity to support liabilities. There is urgent need for sound back up by reliable institutions preferably government to all risk plans and transactions. Protection must come from the government through stable financial system. Products launched in the financial segment need scrutiny and approval by the authorities. ...Show more