The Hindu Business Line : ‘Sub-prime crisis will persist for 12-14 months’

Dr Robert F. Bruner, Dean, Darden Graduate School of Business Administration, University of Virginia, on Tuesday predicted that the current US Sub prime crisis would persist for 12-14 months.

Adverse implications

Addressing Assocham-IACC-PHDCCI joint conference on ‘Crashes and Panics: What Drives a Financial Crisis’ here on Tuesday, Dr Bruner said that US sub-prime crisis would have adverse implications for many economies because of their dependence on the US economy. He therefore advised investors both retail and institutions to invest with caution in Indian stock markets as it might shake up with US sub-prime crisis intensifying further as these would have far reaching implications on the Indian economy because of its close integration with US economy.

Dr Bruner was of the view that mergers and acquisitions would also be triggered with ongoing sub-prime crisis to absorb market shocks. He was of the opinion that the best way to manage crisis include having sufficient reserves and regulate monetary supply as also prompt the central or federal bank to regulate collective behaviour of policy makers.

Dr Bruner gave a prescription to Indian policy makers to bear the burnt of the US sub-prime crisis by not overregulation but making regulators powerful in the real sense to take on the crisis.

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