‘Credit crunch in America has also hit other economies because

“To understand the current financial crisis, we need to clear the cloud of verbal confusion and understand the basics. Words like stagnation, recession stagflation and economic slowdown have been used interchangeably by economists and the press leaving the general public quite stunned,” said Satindra Singh Ahluwalia, faculty member, ICFAI Business School, Chandigarh in a seminar organised by the Chandigarh CFA Association on Monday.

The seminar was based on the most discussed topic these days, “World Financial Crisis: Is the worst over”. Anil Katia (CFA), State Head, HDFC Bank Ltd and Satindra Singh Ahluwalia, a faculty member of ICFAI Business School, Chandigarh, shared their views on the subject.

Ahluwalia explained how the ripple effect of the American credit crunch is being felt by most of the countries of the world because of their inter-dependent economic ties and financial involvement.

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“Countries like UK, Russia, Japan, and Germany have suffered huge losses because of the massive amount of money coming from America,” said Ahluwalia.

He added: “There is a group of countries that have experienced what can be called the ‘participatory impact’, while another group of nations is experiencing what can be called the ‘ripple effect’. India is mainly affected by the ripple effect despite direct exposure by companies like the Tata AIG and ICICI Bank.”