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Restructuring the economy Essay

Large scale corporate restructuring may be the most challenging of all tasks that any government or restructuring body may have to undertake. In the event of a financial failure, complete corporate restructuring may be the remedial step for any country’s economy. For this to be achieved, the local government in any given country has to take the lead in the restructuring process that would then ensure all sectors of the financial market and the economy at large makes a turnaround. Wholistic and transparent policies and strategies should be the guiding lines for corporate restructuring.

With every crisis comes the aftermath of social costs impacted by the people’s outlook on the economy. This should then be part of the restructuring initiative initiated by the government to ensure private investors do not shy away from making investments in the future with the brevity to take risks. All goals set for the restructuring of the corporate and financial sectors should be clearly communicated to all stakeholders on the onset of the process to ensure maximized participation and effective implementation of the restructuring process.

Though a systemic and financial crisis may be taken to be a negative impact on the economy, it has notable benefits in

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that it brings change that may have not been embraced otherwise. With sound legal and macroeconomic frameworks, governments can take on a higher role in the restructuring process as soon as a crisis hits in. System protective measures such as liquidity boost can shield the economy from a total collapse and help shorten the restructuring process that usually takes upto five years to successfully implement.

In any crisis situation, the aftermath may be severe, however, without restructuring the economy cannot be able to get back to its feet – restructuring is therefore critical after economic crisis. Conclusion If not adequately controlled and regulated, system risk can lead to a crippled global economy. In reading this paper, many may come to a conclusion that systemic risk estimation and regulation are elusive to successfully achieve, however, in many ways, where there is no information gap there is successful analysis, estimation and regulation of systemic risk – the resulting outcome is minimized failure exposure and even avoidance.

Though it may not be an easy one day/month/year task, effective significant reduction of systemic risk is attainable by all firms at all levels of the economic framework. Stakeholders and economy builders as well as systemic risk regulators are charged with the task of working towards a sustainable global economy – this is the goal of all successful and effective leaders. Learning and improvements made from past policies based on past crisis deterrence measures is the ultimate task all regulators must undertake and implement.

In the hope of arresting financial failure indicators early to prevent economic crises, all economic stakeholders are at it again – working towards improved and tougher systemic risk regulatory policies.

References Books:

Acharya, V. V. & Richardson M (2009). Restoring Financial Stability: How to Repair a Failed System. Wiley and Sons. Davis, E. P (1995). Debt, Financial Fragility, and Systemic Risk. Oxford: Clarendon Press. Felton, A. , Reinhart, C (2008). The First Global Financial Crisis of the 21st Century (Ed). London: Center for Economic Policy Research. Retrieved May 14, 2009 from http://www. voxeu. org/reports/subprime/reportpdfy 14, 2009 from Jorion, P. (2000).

Value at Risk: The New Benchmark for Managing Financial Risk. 2nd ed. New York: McGraw-Hill. Kaas, R. , Goovaerts, M. , Dhaene, J. , Denuit, M (2008). Modern Actuarial Risk Theory: Using R. 2nd ed. Springer. Rauchway, E (2008). The Great Depression and the New Deal: A Very Short Introduction. New York: Oxford University Press. Saita, F (2007). Value at risk and bank capital management. Burlington: Elsevier Academic Press Robert J. Shiller (2008). The Subprime Solution: How Today’s Global Financial Crisis Happened, and What to Do about It. New Jersey: Princeton University Press

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