Enough of Investment/Retail Banks, Now it’s time for Countries...

We have heard of n number of investment banks, retail banks and few insurance firms going down the drain because of ‘credit crunch’. Now it’s turn for few countries for a change. Reports are Iceland and Pakistan is near collapse if they do not act quickly.

 To start with Pakistan is near defaulting its debt. Pakistan's credit rating was cut by Standard & Poor's, which cited doubts about the country's ability to meet $3 billion in debt-servicing costs in the coming year. Rumours are that Pakistan's President Asif Ali Zardari is seeking $100 billion to overcome the nation's economic crisis. And I wonder where from he will get that amount of money when US congress itself is unpleased of giving 700billion$ to their own banks and insurance firms. The nation is running short of money to repay state debt. Pakistan's foreign exchange reserves fell to $8.14 billion as of Sept. 27 from $8.80 billion a week earlier, central bank data show. That is less than half of its high of $16.39 billion reached in November 2007. Pakistan’s defence expenditure was near 2.6 billion $ in 2003 and now is grown to 10 billion $ in 2008.

 Iceland's government and banks scrambled Sunday to find the cash needed to rescue the country's banking system and cushion an economy that is one of the hardest hit by the global financial crisis in the developed world. The krona, Iceland's currency, has plummeted, imports have dropped, inflation is soaring and consumers are putting the brakes on buying as household debt costs climb. The crunch is threatening to make the island nation a showcase of the worst it can deliver. The Central Bank of Iceland has about €2 billion in foreign-exchange reserves. Standard & Poor's and Fitch Ratings both cut Iceland's sovereign debt rating last week. Moody's Investors Service is also thinking about downgrading rating for the country.