Sunday, January 4, 2009

Financial Scams and Financial Literacy?



When financial markets perform correctly, when financial institutions do what they are supposed to do, when regulators do what they are supposed to do and particularly investors do what they are supposed to do, we could find a "good" yet delicate balance where even apparently "not important" details count in order to have markets where money serves the purpose of financing business projects, give the people to possibility to buy goods and products by using credit wisely and on the other hand, the possibility to create wealth by investing and saving wisely under a reasonable certainty of having financial regulators regulating markets in order to avoid unnecessary risks.

What happen when that delicate balance is broken? Even when those markets run "smoothly", people must be aware that understanding what's going on is essencial for the sake of financial literacy to understand HOW and WHY things happen.

While witnessing the financial crisis those markets are grappling with, we've heard shocking news about financial scams like the Ponzi scheme that Bernard Madoff executed and on the other hand, foreclosure scams.

Even though it could be difficult for people to understand why Financial Literacy is key to understand these financial tricks, it is a fact that many people has been affected, therefore, learning what scams like these ones mean, is also an important learning subject.

Let's watch...

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Financial Culture / Cultura Financiera
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