The paper proposes certain structural changes in banking system and the regulatory guidelines to prevent credit crisis in future. The case of Banking giant Barclays is discussed. The paper examines how the policies of Barclay bank to not to take government aid was beneficial in handling mortgage crisis…
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This research will begin with the statement that innovations in banking sector, which accelerated in last 15 years are partly responsible for micro imbalances, which emerged when the developing nations accumulated large current account surplus and the large current account deficit emerged in USA, UK, Ireland, Spain and other countries. According to Dennis Blair , director of U.S. National Intelligence , the implications of financial crisis “ the primary security concern of US, longer it takes for recovery , the greater is the likelihood of serious damage to US strategic interests”. Barclays PLC is a universal multination banking and financial services company, which was 10th largest bank in 2010 and has operation in more than 50 countries. The bank has total assets of €1.94 trillion (as on June 2010) and it organizes two businesses Corporate & Investment Banking and Wealth Management, and Retail & Business Banking. In 2007, the bank was forced to borrow £1.6bn from the Bank of England. UK government planned to induce over £7 billion in Barclay (Reuter reports) in 2009, but the bank rejected the government offer and instead raised £6.5 billion of new capital through cancellation of dividends and private investors. The bank cut 1400 jobs in first half of 2011 and another 1600 in 2011 and the CEO, Robert Diamond claimed the bank is now back on track. During the banking crisis Barclays invested of £800million i.e. $1.64bn in risky US home loans and it cut 2,130 positions across its investment banking and investment management divisions, and about 2,000 job cuts in retail. In U.S. securitised credit corporate bonds played a major role in mortgage lending and it also led to the formation of Fannie Mae, in 1930, and it saw an explosive growth in terms of scale and complexity from mid-1990, which supported - 1. High growth in the stock value and total stock credit securities. 2. The rise in complexity of securities, which were sold and the growth of structured credit products. 3. Explosion of volume of credit derivatives, which enabled investors and traders to hedge underlying credit exposure, which created synthetic credit exposures The financial
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(“The Working of Banking System in Pre-Recession Phase: The Case of Essay”, n.d.)
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“The Working of Banking System in Pre-Recession Phase: The Case of Essay”, n.d. https://studentshare.org/macro-microeconomics/1396191-the-working-of-banking-system-in-pre-recession-phase-the-case-of-barclays.
Causality between Banking Instruments of Islamic and Conventional Banking System: A Case of Malaysia. In Muslim countries, Islamic banking industry has significantly contributed in the process of economic development. The profit and loss sharing concept as an alternative source of banking has added largely to importance of Islamic banking.
Barclays Bank in India Management Report Name of the Writer Name of the Institution Barclays Bank in India I. Introduction No modern business today can exist in a vacuum. It has to face the internal and external forces that abound in the business environment.
To be precise, the research findings depict that the strategic decision to expand its business in the Indian market was largely advantageous for Barclays, although, during its entry to the market, environment was highly volatile and challenging. Table of Contents Executive Summary 2 Introduction 4 Section 1 5 1.0.
The author explains that the banking industry has also been going through a process of reformation lasting over two decades. Market liberalisation, as well as the induction of latest information technologies led to a strong trade growth resulting in several mergers and acquisitions in addition to off shoring potential.
Real GDP The first series explored here is the growth of real GDP. The data is presented in figure 1 with the bars marking the recession periods. It should be noted that a recession is typically a period where the real GDP falls for 3 successive quarters.
Hence, even banks in our region should act promptly," added Mike Jennings, leader of the financial services industry group of Deloitte Central Europe.
According to the above statements, the years 2007 and 2008 turned out to be challenging and sometimes, discouraging for the biggest financial institutions of the world.
The current banking system is mainly concentrated on paper transactions and various forms of wire transfers. Any money that needs to be sent is delayed in proportion to the farness of its destination at least in the case of paper transactions. This delays business deals and this delay is also known to have destroyed many lives.
al in which, following an international investigation, the bank was fined 290 million pounds for manipulating the rates of the London Interbank Offered Rate (Libor)(Jalili & Blakeley, 2014). Overall, these controversies have tainted the image of the bank from a corporation
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