As the world grapples with the realities of financial struggles, it is of utmost importance that stringent measures be put in place and implemented to curb such problems. Having observed the other past two policies fail to produce tangible results, the concerned parties have no other option but to find ways of implementing this policy.
Even though the process of implementation has been slow, it would be ridiculous to watch as we make the same mistakes that led the world to doubt the financial strength of lending institutions. As this reality dawned on the policy makers, it appeared obvious that some austerity measures had to be put in place. Those who found themselves drowning in this financial oblivion can attest to the fact that something had to be done as soon as possible to reclaim sanity in this sensitive sector. Now that the policies are in place it would be catastrophic not to participate in the full implementation of these measures. Those in the financial sector have to rise against their own selfish interests and participate actively in this vital process of ensuring that we do not find ourselves looking back and heaping the blame on the failure to act decisively.
It is necessary that participants in credit management implement the capital regulation measures as proposed. Even though risks are taken daily in this sector, it would be wise to consider the consequences. In the past this has been a nightmare, especially with others biting more than they could chew. Credit should only be approved if the borrower is in a position to pay back without having to dent their reputation that has already been established. If in any case there is no clear guideline set in this respect, then it becomes quite daunting to work within the stipulated rules.
Liquidity is another important aspect in this regard and should not only be taken seriously but implemented as necessary. There should be a way of monitoring this policy to avoid the pitfalls that come with being too aggressive. Each financial institution should take the responsibility of being honest and possess a high level of integrity to succeed in this area. As the policy makers state it, one should only take risks that can be taken care of when issues turn from bad to worse. The training accorded in this respect is an important way of ensuring that we avoid future turmoil.
Tim Aldiss writes for Omega Performance the credit training solutions experts
