Saturday, August 30, 2008

THE COMMERCIAL LOAN THEORY


Commercial loan theory is the management of eldest asset theory affecting and emerging when European countries to experience commerce tide in supporting the mercantilism. This theory, gives focus at role of asset side in fulfilling liquidity. Then how it’s (the order? Its (the order not other of liquidity would be well guaranteed during tangible assets in the form of short-term loan capable to be liquefied when transaction of normal commerce. Aah…teo... O. RI.
From aah …teo... O... RI we are implementation of it’s(the order in banking. Bank shall only give short-term credit like circulating capital. The credit insurance, guaranteed by payment from the givers or debtor sales revenue. Bank cannot give loan for debtor like securities purchasing, development of building, purchasing of investment goods, and other long-term borrowing. Readiness of bank provides fluent equipments today looked after. Moreover, if succeeding, they will be protected from public negativity prejudice that is not profits in illiquid and there is no drawdown of fund on a large scale. Such a keeping, done by the way of selling loan collateral or even sells securities that in great demand in stock exchange to get money's worth cash required.
Thereby bases on this theory, bank can look after image from public sensitivity negativity opportunity. However, in decision to grasp it is must pay attention to weakness unable to anticipate development of chartered investment counsel, reality there is stability in number, and simply bank liquidity can be assisted by banking system as an overall of financial intermediary complex.

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