StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Financial Crisis of 2007-2009 - Essay Example

Comments (0) Cite this document
Summary
Financial Crisis of 2007-2009 After the growth, expansion, innovation, and modernization in technology and science in the last few decenniums, the nastiest cataclysm that the world encountered during the later half of the 2000s was the financial crises that happened in 2007…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.7% of users find it useful
Financial Crisis of 2007-2009
Read TextPreview

Extract of sample "Financial Crisis of 2007-2009"

Download file to see previous pages Crash in the housing market also came under the occurrence in many regions of the world, as an outcome, a huge number of vacancies lingered. In addition, the crisis also played a vital role and made a deep impact in the breakdown of many businesses with falling off in consumer prosperity. The 2007 financial crisis is also termed as the Great Recession, the Global Financial Crisis (GFC), and Credit Crunch (Kolb, pp.77-139). The destruction of international financial institutions was outcome of the crash down of US housing bubbles, which lead to decline in the real estate pricing. Housing bubble is an economic bubble that arises in the local or international real estate market from time to time when the worth of the real estate properties faces a swift increase, which becomes unmatchable with the earnings and other economic factors. The financial crisis came to an end until mid of 2009, although it had left an indelible imprint across the globe that is still coming under experience. According to some research conducted by economists, it came under limelight that the crisis was completely manmade and was the result of wrong financial decisions. The stakeholders specifically the owners focused on the profit aspect of their business and neglected the risk factor involved in this profit making activity (United Nations, pp.1-10). In the years 2005-2006, the US housing bubble was packed, overcrowded and was at its highest point, which lead to the abrupt ground or the main cause due to which the crisis happened (Kolb, pp.77-139). The default rates that were high previously on subprime and adjustable rate mortgages further skyrocketed. The housing prices started to increase at a high percentage as banks started to provide the prospective mortgagee with more loans. Prospects were motivated by banks to take high loans ignoring the segment of interest rates, with a perspective and confidence that they would be able to repay the loans in less time. The housing prices dropped at a drastic speed as soon as the interest rates started climbing. Housing and credit upsurge lead to augmentation of various financial accords, namely mortgage-backed securities (MBS) and collateralized debt obligations (CDO) at an unprecedented rate. This caught the attention of the local and international investors and corporations to plunge in the US housing market as they observed an opportunity to make potential profits from this market. With the turn down in the housing value, innumerable people including the global investors/institutions, borrowers and investors in subprime MBS faced heavy and noteworthy losses. The decline in housing value was so severe that had they auctioned the house, the recovery of the mortgage price would not have been possible. In 2006, the lenders of the housing loans received an incentive of foreclosure. They approached the legal officials for the recovery of their money (Kolb, pp.77-139). The banking organizations got a financial power and they started absorbing customers’ wealth to make for their losses. This crisis was not only come under observance in housing sector but other factions of the economy also experienced the same drastic effects. The main reason for the crisis includes a number of factors. The mortgages come under sanction to a huge number of people, without ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Financial Crisis of 2007-2009 Essay Example | Topics and Well Written Essays - 1250 words”, n.d.)
Retrieved from https://studentshare.org/environmental-studies/1422169-financial-crisis-of
(Financial Crisis of 2007-2009 Essay Example | Topics and Well Written Essays - 1250 Words)
https://studentshare.org/environmental-studies/1422169-financial-crisis-of.
“Financial Crisis of 2007-2009 Essay Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.org/environmental-studies/1422169-financial-crisis-of.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Financial Crisis of 2007-2009

Service Management in Financial Services

 Measurement of quality is the result of the services provided to the customer with a prompt response based on the requirements and expectations. Quality of various processes must be managed so as to provide the customer with consistent, accurate and timely results. These results must be of high quality because various other factors pertaining to a business deal are dependent on them. Quality assures the customer of an appropriate service that includes an error-free transaction, access to accurate data pertaining to the specific schemes and services, transfer of credits, changes concerned with the membership and account details and an undoubted trust that helps in attaining the services time and again.

Financial se...
11 Pages(2750 words)Case Study

Corporate Financial Analysis: HBG UK Limited

Analyzing a company’s financial performance is crucial in determining the actual performance and investment potential of a business within the industry. The financial analysis not only gauges the internal but also the external aspects of a company.

Specifically, the use of financial ratios is considered as efficient indicators of a company’s financial situation and overall performance. Most of these financial ratios are calculated from the data provided within the financial statements of the company. Financial ratios are not used only in determining the performance of the company but also in comparison to other competitors’ financial status and the possibility of future bankruptcy.

HBG UK Li...
14 Pages(3500 words)Case Study

Marketing, Financial and Production Analysis of Vail Resorts

Finally, in 1966, the town of Vail was established. By 1985, George Gillett purchased Vail Associates and high-speed quad chairlifts were established to help the skiers get to higher elevations on the mountain. In 1992 Apollo Partners purchased Vail Associates, which in turn became Vail Resorts Inc., which was followed by the acquisition of ski resorts Keystone and Breckenridge. The acquisition of these ski resorts was a major change that helped Vail succeed in the long run by appealing to a broader market. Both Keystone and Breckenridge have lower prices than Vail Mountain and attract more single- and college-aged customers (Vail Resorts).

The company then added the Real Estate segment which comprised 6 percent of the...
9 Pages(2250 words)Case Study

Unmarried Parents: Financial Provisions

There was no evidence before the court to suggest otherwise. I would, therefore, suggest that the child be examined by an expert in child welfare to first determine whether or not the mother is ultimately right in her assessment that the disparity in the value of her parent’s home causes her some concern. It is also important to determine via a welfare expert whether or not relocating to one of the properties suggested by the father would adversely impact upon the child’s wellbeing. If an expert agrees that relocating and the disparity in the value of the parents’ homes are not matters of concern for the child then an appeal would be likely to succeed. I would go further to predict that the father’s origina...
6 Pages(1500 words)Case Study

2007 Special Olympics World Summer Games

The particular aspects of the marketing strategies applied during these Games are analyzed highlighting the importance of following specific rules when using marketing in the area of sports activities. On the other hand, the particular characteristics of marketing are presented taking into account the fact that marketing is significant for the successful completion of sports activities worldwide. More specifically the financial support offered to athletes and sports organizations because of the promotion of specific products/ services helps the sports activities to be more approachable to people of all social classes. In the case of Special Olympic Games, the development of appropriate marketing strategies can have two significant...
11 Pages(2750 words)Assignment

Accounting & Financial Management

AWB’s operations can be categorized into areas ranging from ‘pool management services’ to ‘harvest financing’, and ‘International commodity management’. Only a company with such a big range of activities and financial outlays can become the benchmark for an equally big company like ‘Woolworth Limited’.

The performance of an entity can be better analyzed through its profitability analyses. The profitability ratios like Gross Profit ratio, Net Profit Margins, Return on assets (ROA), and Return on Equity (ROE). The calculations of such ratios are shown in the attached annexure. The Gross Profit ratio measures the percentage of each pound or dollar of sales remaining aft...
10 Pages(2500 words)Assignment

Financial Management Analysis of Rio Tinto Plc

Taking into consideration that Harmony is the sixth-largest in the world in the gold mining industry, the choice of Harmony God Mining Co. as a benchmark company is the most suitable and justifiable. Moreover, Harmony has also some investment stake in Rio Tinto, and this situation makes the company more suitable for the choice. At places, the benchmark company’s performances have been better than Rio Tinto, and thus Harmony has a competitive edge as well over Rio Tinto.

Profitability ratios like Operating Margin Ratio, Net Margin Ratio, Return on Assets (ROA), and Return on Equity (ROE) are the performance analyzer of any company. Profit Margin ratios show the relationship between profit and sales. Since profit ca...
8 Pages(2000 words)Case Study

Emergency Economic Stabilization Act of 2008 and How It Has Impacted the Financial Markets

Though there were objections from various quarters about the huge amounts of tax payer’s money being used in the bailout of huge corporates, the Act has been successful in moving the downturn towards a flat point and now has started slowly moving towards a recovery stage. The various programs under the EESA 2008 have played a significant role in the financial sector, housing mortgage, and banking institutions to save the institutions from complete disaster.

The Emergency Economic Stabilization Act is a huge taxpayer bailout designed to rescue the financial sector. The amount of money to be used is around $700 billion or $2000 per American citizen (Public mark up). Emergency Economic Stabilization Act of 2008 is al...
10 Pages(2500 words)Research Paper

The Effects of Financial Crisis on Supplier Selection Criteria of the Oil and Gas Industry Equipment Market

It is a difficult task to find those vendors who not only have the adequate quality and quantity of the needed raw materials but who also have an attitude of efficiency and display commitment to customer service (Sonmat, 2006). Further, organizations also strive to locate and select vendors who can be depended upon for long term relationship.

The number of factors or attributes desired from the vendor is vast, and different organizations and different industries place different importance on the attributes (Sonmat, 2006). Some of the vendor attributes may gain importance owing to the nature of the industry, for example, in the case of consumer perishables suppliers, like fresh vegetables or fruits, the buying firm would...
20 Pages(5000 words)Literature review

Management of Financial Institutions

The first paper is about International Banking Regulation. For banks that may want to spread across borders, the study gives an explanation of how the various policies and laws may affect its operations. The second paper in the study gives the various restrictions on the development of Pan-European bank mergers. It shows how regional liquidity shocks limit cross-border bank mergers. Thirdly, the study shows the various methods banks use in risk assessment when lending to less developed countries’ sovereign governments. It gives a topology that can help banks efficiently assess risks. An explanation of the multi-nationalization that is given in this paper comes with a model showing how applicable the profit maximization hypot...
8 Pages(2000 words)Literature review
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Financial Crisis of 2007-2009 for FREE!

Contact Us