Opinion - Letters to the Editor   

Market crisis

The recent Lehman fiasco is an eye opener to shareholders. How did the statutory auditors sign the accounts for the quarter ending August 31, 2008 of Lehman Brothers when they ought to have raised an alarm.

The bailing-out of AIG has come even as the U.S. economy is coming to terms with its own recession maladies. AIG ought to have assessed its own risks before embarking on its coverage. Laxity and over optimism have a price attached to them. Bailing out is not a solution. The objective of an insurance company is to cover risks to rescue the insured and not be rescued by the government.

Ashok Jayaram,

Bangalore

The crisis should open the eyes of our regulators wide. The U.S. has pumped in billions of dollars of taxpayers money to bail out the reckless and callous financial institutions, whose CEOs had enjoyed hefty packages until the bubble burst. Total deregulation and heavy dependence on brand names, ignoring hard realities, were the main causes.

There has been increasing advocacy of increase in FDI in banking, insurance and retail sectors ever since the Left withdrew support to the UPA government. Even the GoM had given its consent to increase the FDI limit in insurance. Are we to fall a prey to the foreign companies whose bases are tumbling and who have no scruples whatsoever?

If the FDI limit in insurance is raised to 49 per cent, as envisaged by the GoM, and the share of the Indian partners is reduced, the gullible Indian policyholders will be in the doldrums. Will the government realise the dangers of increasing the FDI in sensitive sectors

M.S.R.A. Srihari,

Khammam

The financial crisis in the U.S. reveals that the biggest economy has not been able to surmount the after-effects of the sub prime crisis. Nor are the fears of another great recession like the 1930s over. Because of the greater integration of economy, its ripple will be felt the world over. Companies such as AIG have a sizeable presence in India too. The present developments call for urgent precautionary steps back home.

Salin Thomas,

Kottayam

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