Before Moving to Another Rescue Plan, Review Your Risks, Continued

by Robert N. Charette

It has been a month since I wrote the first part of this Advisor in which I suggested that governments may need to understand the underlying sources of financial risk before they kick off yet another rescue plan (see "Before Moving to Another Rescue Plan, Review Your Risks," 6 November 2008). I still think that is pretty good advice. For in this short time, several new financial rescue plans have been unveiled -- covering everything from US auto manufacturers to US home mortgage holders -- as well as old rescue plans that were buried but are now being revived. Let me speak to just one of these plans -- it has to do with stabilizing banks and financial institutions.