There’s no denying that the U.S. has a financial problem
that needs to be fixed, but the big debate is on how to go about doing so. Some
claim that America is going through a phase of rebalancing itself. If you look
around, this is somewhat so -- just look at the softening prices of homes in
the subprime market. A lot of the rebalancing is being directed towards getting
in ship shape and fit for an environment that’s more normalized. It’s said that
we are heading towards a business environment that has normalized levels for
savings, liquidity and risk premiums. Banks and other financial institutions
are rebalancing their balance sheets by eliminating assets and increasing
capital and durations of their funding.

People of America are rebalancing their spending habits and
their personal leverage. Even the dollar is going through a rebalance all over
the country as housing inventories continue to increase. Those that purchase
the inventory will have to obtain financing from the same financiers whose
balance sheets are being rebalanced. Many are hoping that this all works out
and that soon the housing market will clear.

A lot of people are relying on technology and regulation to
change the American industry and the associated financial architecture, which
is shaped by global trends. So far, the technology trends are pretty much
clear, but the regulatory trends aren’t as much. The financial crisis has
opened a large global debate on regulatory reform.  With this, there is potential for the
organization of guiding principles for financial institutions and markets to
handle complications in the future. One special principle that should probably
be applied to the reform include global synchronization of regulators, central
banks and other financial institutions, which will bring an understanding and
management of systemic risk. A failure to plan is planning to fail, so without
the financial systems coming together to create regulations to follow, this
financial meltdown will happen all over again. Plus, it’s always better to be
safe than sorry.

During the debates it is important the each party is willing
to give a little because beggars can’t be choosers. The financial crisis is
affecting everyone now, so everyone has to put their two cents in and take the
two cents of others in order to fix the financial crisis in the U.S. and around
the world.

Robin Trehan is management and financial expert. More
information on him can be found at www.creditcapitalfunding.com
www.businesscreditfunding.com