The current economic crisis that surfaced in July 2008 has taken a big toll and invariably no one is spared whether in business or not. Entrepreneurs, Legislators, Executives, Regulators & Experts are busy in finding out the reasons of such catastrophic economic failure. Liquidity crunch, over estimation, over expansion, over valuation, over expenditure, sentiments and so on, but all man made!! Large number of corporate failure lead to request for the bail out packages from the government. To offer bailout packages means passing off responsibility of loss makers to the general public or backdoor socialism.
The author propose permanent solution by creating Value, Kinetic & Safety Fund (VKS Fund) from security transaction charges over transactions taking place during normal working of a company. The fund so collected may be supervised by high power committee and can be released to the company in the time of crisis. The model is on the basis of equity and have multiple advantages. VKS Fund save the companies from the crisis and provide economic stability to the country in trouble.
Download full paper from SSRN:
Keywords: bailout, economic crisis, VKS Fund, Crisis fund, Corporate Contigency fund, Security Transaction Charge
JEL Classification: A1, G00, H00