{"id":145,"date":"2013-07-12T07:08:48","date_gmt":"2013-07-12T07:08:48","guid":{"rendered":"http:\/\/asadkarim.co.uk\/?p=145"},"modified":"2013-07-12T07:25:10","modified_gmt":"2013-07-12T07:25:10","slug":"systemic-risk-ge-capital-and-aig","status":"publish","type":"post","link":"https:\/\/www.asadkarim.co.uk\/?p=145","title":{"rendered":"Systemic Risk &#8230;.GE Capital and AIG"},"content":{"rendered":"<p>Systemic risk is the risk inherent to the entire market or entire market segment brought on by a major failure of a financial institution. Thus\u00a0if a major bank or financial institution fails, it could being other all the others down, like a row on dominos\u00a0and break the whole financial system and wipe out confidence. Or putting in bluntly, the risk that the failure of one financial institution such as a bank could cause other interconnected institutions to fail and harm the economy as a whole.<\/p>\n<p>The US Treasury Department on Mon 8th July made an announcement.<\/p>\n<p>[<a title=\"Federal Stability Oversight Commitee\" href=\"http:\/\/www.treasury.gov\/initiatives\/fsoc\/designations\/Pages\/default.aspx\" target=\"_blank\">http:\/\/www.treasury.gov\/initiatives\/fsoc\/designations\/Pages\/default.aspx<\/a>]<\/p>\n<p>It now has included <strong>AIG<\/strong> and <strong>GE Capital<\/strong> to the list of companies that need extra supervision by the US Federal Reserve. Remember back\u00a0in September\u00a02008, when AIG got into trouble, The Federal Reserve Bank of New York lent <strong>$182 Billion (<em>1.21% of the US National debt = $182 Billion<\/em>)<\/strong>\u00a0to prevent it from failing, in Oct 2008, in the UK, The Bank of England had to lend\u00a0<strong>\u00a336.6 Billion<\/strong>\u00a0to RBS and\u00a0<strong>\u00a325.4 Billion<\/strong>\u00a0to HBOS.\u00a0Examples of institutions that are too important to fail, thus the term Systemic Risk.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Systemic risk is the risk inherent to the entire market or entire market segment brought on by a major failure of a financial institution. Thus\u00a0if a major bank or financial institution fails, it could being other all the others down, like a row on dominos\u00a0and break the whole financial system and wipe out confidence. Or [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-145","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/145","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=145"}],"version-history":[{"count":3,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/145\/revisions"}],"predecessor-version":[{"id":147,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/145\/revisions\/147"}],"wp:attachment":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=145"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=145"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}