Wednesday, September 17, 2008

Sequential Service Constraint

Wow.. 1st time seeing the "sequential service constraint" problem happening right at home. Just not very serious, coz as all FI (Financial Institutes) operates, they are heavily regulated, especially in sg context. So by running at the FI, people make it more difficult for them to survive, and you can say it is a "self fulfilling prophecy". Take all the money out liao then how can they make money to survive? Certain amount are invested in long-term asset.. which means when people withdraw their money, they are creating liquidity problems for the FIs. As such, the FI got either to borrow short term from the central bank or sell their assets (which might not fetch as much now).. so in the end, they will lose out.

I think i can write an entire essay lor.. haha.. how come when i take my exam that time the financial world wasn't that 'happening' ar?