This is a case study concerning two Newsweek articles, `No More Financial Katrinas` by Jane Bryant Quinn and ‘Judgment Calls: High Finance Laid Low` by Robert Samuelson, which point out the main causes of the financial crisis in the present time. The articles deliberate the pros and cons of financial services industry. Moreover, the authors discuss the possibilities of averting from failure by means of analytics. Analytics is simply defined as the “science of analysis”.
It is a helpful method of generating a competent decision by means of an existing data or information related to the subject matter. In line with the financial crisis, it should have been one of the most effective ways that should have been done by the financial services industry, Federal Reserve, Securities and Exchange Commission and other group of people involved herein. Analytics: Way of Resolving Financial Crisis The financial services industry is one of the most precarious industries today.
It has several sectors which includes investment banking, commercial banking, money-center banks, investment services, mortgage companies, credit card issuers, brokerage firms, investment research providers, exchanges, debt- and credit-rating agencies, money transfers and assurance or guarantors. The whole industry is blamed for the occurrence of financial crisis due to its ineffective ways of raising money prior today. It is irrevocable that the loss of this industry affects the entire world because of its high sensitivity to business cycles.
Over the past few years, the financial services industry focuses on making profits without taking into consideration the negative effects of its impulsive actions. The information on how it should have been organized the flow of money was taken for granted. There are several ways on how financial crisis should have been prevented by means of awareness and proper analysis of the real picture. Greediness should have been the least thing to be included here.
It was the time when the government expressed its power to control the mortgages that gave the regulators the chance to discourage those who are less opportune to pay for it. However, the regulators chose not to cooperate and ignored the chance of holding back the few amount of money that eventually turned into loss. If they have been aware enough to overview the facts, they should have been more responsible to avoid continuous lending of money for nothing.
If only, then, the financial industry has been more considerate to the status of companies on which it kept on funding capitals, therefore, they could think of alternative ways of lending them like lowering the interest rates. Through this, it can not only assist those companies which are experiencing rough situations but also increase the assurance that these companies will be able to pay the money afterwards. Higher interest rates only begets to insufficiency of funds of weak companies which resulted them to failure to pay even the initial amount of money borrowed.
It is apologetic to say that this industry should do lot of adjustments to compensate with their mistakes from the past. Nevertheless, it’s never too late to save the nation from deterioration. If the industry is ready to be aware and socially responsible, then, probably, success is still within reach. References Samuelson, R. J. (2008, April 18). High finance laid low. Newsweek, p. 39 Quinn, J. (2008, April 14). No more financial katrinas. Newsweek, p. 82