Come September” is a catchy tune but finance executives, especially in the US, are unlikely to think of it fondly. That’s because September 2008 marked the end of Wall Street as we knew it. Some people had hoped that the earlier collapse of Bear Sterns presaged the end of the crisis. As it turned out, Bear was just an early warning. With a series of bankruptcies and bailouts the US financial services landscape has changed irrevocably. The seriousness of the situation has been accentuated by several countries reporting shrinking or recessionary economies. What began as a leverage crisis and credit crunch has turned into a full-blown economic crisis affecting the entire world. But is the worst over?
That’s a difficult question to answer, especially since bad news has moved from the stock market to a different theatre—main street.
India is no exception. It was only in September that the emerging India growth story took a drastic turn for the worse. Until then, experts had said India would not be affected to the extent of a slowdown in the US. Since then, it has become increasingly apparent that the global credit crisis is affecting India much more than expected and in more ways than anticipated.
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