SUBPRIME CREDIT-CARDS OF USA
Around today US Federal Reserve — America`s Central Bank , like Reserve Bank of India– is expected to announce new norms for America`s banks/entities about handling of credit- card business. They will cover the whole range — client coverage, interest rates,credit risk coverage, default – recognition, public disclosures, etc. In plain english, make credit-card business more honest and transparent.
All nation`s central banks are famous for locking stable doors after the horses have bolted– our RBI does this very unctuously. America is no exception. Finance people have been warning of USA`s impending subprime credit cards for at least five years.What subprime housing loans have done to America/World financial system is by now known to everyone ,even the British queen(story of which, later). The size of subprime credit-cards bubble of America is much bigger than housing loans bubble.
Fed Reserve`s change of credit- card norms is the sign. The next bubble is about to burst.
(This blog will keep posting signs of our times , not just about finance but about all things that make up what is called life.Watch this space perhaps?)