What so ever may be the reason for this crisis, but, right now, the first requirement is to join hands and make the situation better, because all of us are in the same position and have a common fear.

Every human being from a small investor to a company’s director or some minister, each and every single person is bearing the cost of the present global crisis- in some way or the other. In order to control this tragic condition from becoming even worse the American Federal Reserve and European Central Bank have reduced their interest rates to the greatest extent possible.

But, America and Europe are not the only ones who have taken such drastic decisions; instead, there are 4 more countries- Canada, Sweden, England and Switzerland, which lie in the list of the ‘worst hit nations.’

All the major Banks of the world like Bank of England, Federal Reserve, European Central Bank, Bank of Canada, took the emergency decision and have reduced there interest rates and made it half from there original values.

Amongst the Asian countries Japan and China are the ones that have been affected to the greater extent, although, the stock markets and the Banks of the other Asian countries like India have also been affected, but, the effect is not as drastic as in the above mentioned nations.

In India, the Reserve Bank of India has reduced the interest rates several times to provide liquidity into the market. The various steps taken by the different countries indicate that, the Central Banks across the globe are trying their best to- save the reputation of their respective counties by providing funds to the banks and trying to prevent their economy from declining further.

The Central Banks which haven’t reduced their interest rate since many years are also left with no other option, but, to cut down their CRR. So, now the benchmark rate of Federal Reserve is just 1.5% and that of the European Central Bank is 3.75%.

Similar is the case of other Banks belonging to countries like- Britain, Sweden, Canada; which had reduced their interest rates to 4.5%, 4.25% and 2.5%. The Bank of England will make at least £200 billion available. In last three weeks, China has reduced its interest rate twice, and right now its 6.93%.

Bank of Japan is trying to handle this unexpected situation by removing certain restrictions that were applied earlier, but, it hasn’t reduced the CRR nor has it announced anything of that sort.

The economy of each and every country is getting weaker and weaker with every passing day and any step taken by the individual governments are all failing one after the other. As the share markets are declining day by day, people have started considering gold to be the safest avenue and therefore, every single person is investing in commodity now days.

Read Financial Crisis Part 1: “An Overall view of the Global market”
Financial Crisis Part 2: Major Steps taken by RBI to deal with the present crisis.

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