This paper “Cause of the Financial Crisis: Corporate Governance Failure “ will attempt to deal with discussing on the principal cause behind the financial crisis and will present a brief description of Financial Crisis of 2008…
Download full paperFile format: .doc, available for editing
Extract of sample "Cause of the Financial Crisis: Corporate Governance Failure"
Download file to see previous pages
The emergence of international trade necessitates the role of financial institution at global platform and now, the world economies engaged in international trade relation have the opportunity of share their risks with other economies. However, this can also be viewed as major disadvantage of international trade as crisis in the major economies soon spread over other related economies. This can be explained thoroughly using the latest evidence of the global Financial Crisis of 2008 (Mullerat, p.135-137). The Financial Crisis of 2008 was emerged in Western first world countries like United States, Canada, the European countries United Kingdom, Germany, Span, France etc and the influence of crisis in these economies soon impacted the entire international market directly as well as indirectly. There is a debate over the origin of this financial crisis and major reason behind this crisis.
This paper will attempt to deal with the same by discussing on the principal cause behind the financial crisis. However, at first a brief description of Financial Crisis of 2008 and its background will be presented to understand its nature. Next, the root cause of the financial crisis will be explained followed by role of the agents of financial crisis will be explained in intensifying the crisis. Finally, the overall discussion will be summed up in the conclusion followed by a set of plausible recommendation. 2. Background of Financial Crisis of 2007-2008 A recession period can be declared by considering the depressing economic growth, reducing the market demand as well as GDP, industrial production, reducing flow of resources etc. As per the economic theory of business cycle, there are four cyclic phases of an economy i.e. slump, recession, recovery and boom and these phases including the recession are quite normal for any economy (Hubbard, p.310). However, in case of financial crisis of 2008, many scholars have defined it as unnatural crisis and did not belong to the normal business cycle as they believe due to unconventional activities of financial market this crisis was forced to impact entire world economy. The financial turmoil was first detected in the first world countries like USA, and other developed countries of Europe and these countries were the major victim of this crisis. Prior to this financial crisis of 2007-2008, the entire Western financial market was enjoying the boom period and many have identified that this global downturn was an effect of constant negligence. When it crossed the limit, a number of multinational corporate giant collapsed and its immediate effect fell on entire financial market. This global downturn is termed as the financial crisis as this recession was mainly led by financial market that caused financial crunch during 2007-2008. This crisis also termed as the sub-prime mortgage crisis as the risks due to sub-prime mortgage is the main technical reason for this crisis. “
...Download file to see next pagesRead More
4.2.Discussion and Findings 18 5.Chapter 5 19 5.1.Conclusion 19 5.2.Recommendation 19 Reference 21 1. Chapter 1 1.1. Introduction The importance of corporate governance for the financial reporting can be explained by describing the relationship between business and society.
The issues of corporate governance are paramount to multinational companies. They promote good decision-making, business practices and opportunities for investors to warrant the integrity of their investment. The corporate
The 2008 financial crisis is one of the main ethical case studies owing to the global implications that result from the decisions made by people against the ethical requirements in the society. The 2008 financial crisis is well highlighted by moral
Ethics & Fraud 1.0 Ethical Values & its Effectiveness It is observed that an organization with diverse workforce witnesses various ethical dilemmas and issues that arise out of ethical values. This happens because the interest of organizational and personal ethics is different from each other giving rise to potential conflict among employees and managers (Pollock, 2011).
Corporate governance is undoubtedly fundamental in the organizational setting. Practices of corporate governance influence and inform the interactions and relations between various stakeholders within and across an organization or industry. This was well observed during the global financial crisis that led to the failure of banks in the UK.
It was because of this reason that the regulations such as Sarbanes Oxley were promulgated in order to make it mandatory for the organizations to have a certain degree of corporate governance mechanism within them. The failure of large institutions especially financial services
The author of the essay states that countries with weak legal protections suffered greater exchange rate depreciation and this led to severe stock market declines during the crisis. During the crisis when the managers have more control rights than ownership rights, the firm’s perform poorly.
With this change due to globalization, the thought process of people has also significantly influenced and they have realized their priorities.The policy makers realized the necessity of interdependence and co-operation in encouraging the international trade.
Al. (2010) observed in the ‘Principles of Contemporary Corporate Governance’ that “Corporate Governance refers generally to the legal and organisational framework within which, and the principles and processes by which corporations are governed. It refers in particular to the powers, accountability, and relationships of those who participate in the direction and control of a company.
8 Pages(2000 words)Research Proposal
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Save Your Time for More Important Things
Let us write or edit the term paper on your topic
"Cause of the Financial Crisis: Corporate Governance Failure"
with a personal 20% discount.