Discuss the range of possible outcomes if Shakespeare's advice of Essay

Discuss the range of possible outcomes if Shakespeare's advice of neither a lender nor a borrower be should become a general law - Essay Example Besides, it provides easy and cheap liquidity than other available lenders and intermediaries (Delaume 2012). In the event that Shakespeare’s statement was a general law, there would not be the expanded financial liberalization and enhanced volumes of private capital flaws in the developed countries that was characteristic of 1990s. The post crisis capital mobility in the developing world (especially in Asia) was as a result of four forms of capital inflows; portfolio investments, direct investment, bank loans and other investments. Bank loans in countries like Malaysia saw their economies grow from third world economies to second world status (Shin-Ichi, 2013). Loans that were advanced to the states through World Bank and IMF helped improve the overall economy of the nations and the welfare of their citizens. This would not be possible had Shakespeare’s statement been a general law. In domestic financial markets, banks are the most outstanding means of channeling savings to investments with the most favorable returns. In the event that the statement by Shakespeare became a common law, banks would not provide liquidity and permit efficient pooling of risks (Shin-Ichi, 2013). The fact that there are lenders and borrowers creates an environment that enables the activities of banks to alter the composition of capital in a manner that is potentially good for enhancing capital accumulation. Development of banks as lending institutions institutionalizes them as the gatherers of information about firms and reducing corporate myopia by conquering the quandaries associated with informational asymmetry (Shin-Ichi, 2013). The powers are given to the banks by depositors. These powers have led to availability of valuable information that helps a firm engage economically with another. Had lending and borrowing been absent, such powers would not be within the reach of banks. Economic development and