Financial Instability

What exactly is the problem?

Throughout the world Financial Instability is causing repercussions that are causing extreme measures to be brought into play. More Precautions are being utilized in order to maintain financial prosperity. People are also becoming more timid about taking out loans because of the ever increasing loan interest rates that plague our receding economy.

Who is most affected by the problem?

People who are more likely to not pay back loans or other debts are the main people affected by increased interest rates and global financial instability. These people are causing a high risk to be emulated throughout the banking society. This high risk correlates to a harder process to be rewarded with a loan or other lending contracts.

What causes the problem?

A growing recession is causing people to be unable to make payments. The inability to make payments and their unethical morals are causing people to take loans out knowing they have no chance to pay them back. This recklessness is causing a gap in financial instability where lenders are hesitant to lend, causing those people who actually can pay the loans back to possibly not get them.

Has anyone tried to do anything about it? If so, why haven't they succeeded?

The government has tried to place regulations and other restrictions to protect against financial recession and instability. This is basically their way of making a back-up against any possible bad financial decisions. These unfortunately have not succeeded, obviously as we are currently fighting the recession each and every day we live.

What is likely to happen in the future if the problem isn't solved?

If the problem isn’t solved then financial collapse of a global scale will happen. If this financial collapse does indeed happen, we may drop back down into strictly a trade mentality, in which only goods are traded for services. Another possible problem that is portrayed by the issue is mob mentality amongst a countries population. If the currency of that nation does not hold true and strong, then many people will resort to violence and crime to not only be spiteful, but also to survive.

Someone should stand up and propose a drastic and effective solution to bring our global economy back from the brink of self-destruction. This proposal could include the likes of lower and more effective tax rates, more power to financial divisions to lower national debt and other possibilities.