How JPMorgan Chase Survived the Financial Crisis - Case Study Example

The paper "How JPMorgan Chase Survived the Financial Crisis" is a perfect example of a case study on business. This paper examines how JPMORGAN CHASE & CO conducted business during and after the 2007-2008 Financial Crisis. The Financial Crisis did not take place in one day, one month, or one year; however, it took several days before the economy recovered from the recession. The Financial Crisis was marked by rapid deterioration of the economic climate that began in the U.S. banking and financial services sector and spread to all sectors of the economy. The U. S banking system was the epicenter, where the sub-prime residential mortgage business had advanced from problem to crisis before it spanned into the entire economic system.

The crisis caused a series of financial and economic events that adversely affected the economy. Examples of the events included the collapse of home prices and foreclosures in the cities and towns that provided residence to the citizens. Banks and brokerage houses failed to perform. Management changes characterized most organizations as the shareholders thought that current managers were initiating organizational failures. Unfavorable earnings announcements (losses and "surprises"), numerous securities offerings to prop up financial positions, and widespread assets sales featured throughout the crisis period. The decline in economic performance caused waves of employee layoffs followed by high unemployment, write-offs, dividend cuts, abrupt declines in stock prices, and mid-night mergers.

During the previous six years of bipartisan by Democrats and Republicans, the Federal Government and Fed initiated policies to reform, mend, and salvage the banking system; this was after the nation’s banks demonstrated that they did not act responsibly. Banks received direct and indirect assistance from the government in various forms and varieties. One of the main thrusts of the Treasury and Fed initiatives involved an effort to lower interest rates. This was done in an attempt to restore liquidity and encourage lending. Tools of monetary control, such as Open Market Operations became critical to the economy. See Chart 1.0, “Open Market Operations”.