Crisis: Proposing a Diversified and Interacted Solution

Abstract

It is not possible to evaluate the overall consequences of the present financial and global crisis beyond the government contributions to stabilize the financial sector and recover prior economic growth rates. It is not possible to close the eyes to the great ludicrous (dramatic) comedy without proposing what is necessary to do in order to prevent such deep and irresponsible disruption in the financial activity as a support to economic structure development and economic growth in the world. It is universally recognized that regulation and control have entirely failed and that must be more deep, liable and specialized to be called to account all the responsible, more exigent in companies’ capital structure requirements through technical-avoiding risk taking proposals. But it is also necessary and very urgent to implement the core of our solution proposed here and based on an organizational (operational)-avoiding risk taking proposals, when it is known the systemic risk coming from financial unbalanced banks in the present financial organization and system. In fact, there is very different risk taking levels associated with different banks activity: commercial or retail banks, investment and advising banks and, mainly, brokerage banks, which are related to complexity and opaqueness of some capital markets financial products. Without these different and structural changes, it will not be possible neither a sustainable financial system linked to a balanced economic structure and growth nor a true social engagement to overcome all or the main human problems associated with development. The present financial and further economic and social crisis is not a country-problem but a very serious worldwide top problem. This problem requires more financing flexibility conditions beyond traditional debt, equity and both debt and equity, based on new debt adjustment models where interacted short and long-term financial variables relate a co-operation to achieve a permanent financial balance. This interacted purpose and method corresponds to measure the existence (or not) of strong conditions of financial sustainability, exactly the primary condition to maintain firm’s sustainability conditions to develop all kind of business and improve economic structure and operations. It is not possible to grant sustainability without realizing permanent improvements in firm’s financial and economic activities to meet a competitive economic structure. The interacted conditions of financial sustainability also corresponds to present a corporate financial and sustainable ratio (CFSRt) as a financial-avoiding risk taking proposal, which should complement those mentioned before: technical-avoiding risk taking proposals (adoption of solutions related to more deep, objective and specialized regulatory actions in the financial system) and organizational (operational)-avoiding risk taking proposals (also related to the financial system on adjusting the banking operations specific risk to a correspondent specific organization without cross participations or holdings).