Extract

Worldwide economies are experiencing difficult times due to financial inability to meet national debt payments for the foreseeable future. Countries work hard to cut costs, at the expense of certain social needs, therefore reducing budgets in areas that may impact the past, current, or future workforce. The financial turmoil caused by some of the most representative banks between 2007 and 2009 is still bearing poisoned fruits so the 2011, 2012, 2013 and possibly the 2014 vintages have been affected by this unwanted fungus. It is no longer a mystery what happened in the recent past to precipitate the financial crisis: unscrupulous bankers tried to maximise profits at any cost, while investors underestimated the risk behind certain financial operations, and regulators failed to implement either suitable rules or apply the ones already in place and some credit rating agencies masked the reality by failing to provide good intermediary services, rightly assessing the creditworthiness of financial instruments or acting as efficient gatekeepers for issuers of debt instruments. It would be unfeasible to cover in this chapter all the causes of the present financial troubles so it will instead concentrate and assess only one of the neuralgic causes of this worrying time.