This paper offers a comprehensive analysis of the UK economic policies on overcoming the economic crisis of 2008. Also major causes of the global financial crisis are determined. In 2011 The UK Government developed its “Plan for Growth”, where all the measures in tackling the crisis were listed…
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Every crisis has a unique cause, as well as characteristics; however, the following are typical amongst the factors responsible for generating this disaster: overshooting of markets; rise in credit; excessive debt leveraging; incorrect view of dangers; a country’s capital flight; off-balance sheet procedures by banks; macroeconomic policies that are non-sustainable; deregulation with no appropriate system of supervision; and latest financial instruments utilized in an inappropriate manner. The distinctiveness of the current disaster is that it happens to be a combination of a financial crisis coming from one of the largest world economy, i.e. the USA, with a universal downturn. The present financial crisis got triggered by the replete of the housing bubble, together with the consequent sub-prime mortgage crisis within the USA. Although the crisis has not yet been thoroughly analyzed, there are suggestions by experts that a number of causes explaining the reasons for the sub-prime crisis, which exploded in August 2007 in the USA ( Hansjorg & Milka 2011, p.36). There are two significant trends in the years resulting in the crisis; firstly, interest rates had been dropping since the 1980s, secondly, following the financial crisis in Asia during 1997–1998, countries began accumulating foreign exchange reserves, aided by the current account deficit of the US. The majority of countries diverted part of their reserves to sovereign wealth funds put into higher-yielding assets compared to the US Treasury, in addition to other government securities, streaming into high technology stocks and, following the “dot.com Bubble” spout in 2000, to housing markets within the USA and countries such as the UK. The continuous falling of interest rates, along with the large...
This paper clearly outlines the effectiveness of the economic response of the UK to the global financial crisis challenges.
Every crisis has a unique cause, as well as characteristics; however, the following are typical factors responsible for their origination: overshooting of markets; rise in credit; excessive debt leveraging; incorrect view of dangers; a country’s capital flight; off-balance sheet procedures by banks; macroeconomic policies that are non-sustainable; deregulation with no appropriate system of supervision; and latest financial instruments utilized in an inappropriate manner.
In March 2011, the Government published its “Plan for Growth” This plan had four ambitions: creating the most competitive system of tax within the G20 group of key economies; making the UK the best place within Europe for starting, financing and growing business; encouraging investment, as well as exports as a key to a more balanced economy; and finally creating a more educated workforce that happens to be the most flexible within Europe.
Amongst the measures announced were a lessening in the tax rate on the profits of businesses; an internationally competitive tax rule governing multinational organizations; tax enticement for company investment; an embalm of deregulation particularly for helping small businesses; additional investment within infrastructure, science, vocational training, research and development.
In 2009, the international leadership of the UK through its chairmanship of the G20 assisted the world in taming the worst economic crisis. It succeeded in drawing the leaders of the world's main economies at the G20 Summit thereby agreeing on strongly coordinated action of stabilizing the world economy.
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“Economic Policies of the UK on Overcoming Global Financial Crisis of Essay”, n.d. https://studentshare.org/macro-microeconomics/1399420-economic-policies-of-the-uk-on-overcoming-global-financial-crisis-of-2008.
The financial crisis affected the macroeconomic aspects such as the employment, government spending, domestic and international borrowing. In addition, it resulted to the poor performance of the stock market in many countries, collapse of the local and international financial institutions as well as bailout of the banks by the governments.
This Global Financial Crisis indeed had a dreadful effect on the international economy. So, in many countries, key players within economies such as stock markets as well as large financial institutions did succumb to the effects of global financial crisis.
As International Labor Organization reported, unemployment has grown from 20 million to 50 million by the end of 2009 due to the crisis (Bresser-Pereira 2010, p. 499). This paper addresses the recovery process of the economic crisis especially in relation to the economic tools of monetary and fiscal policies that have been found to be effectual to reheat the crisis.
FED plays an important role to maintain the US economy through different tools. It argued, that the FED was the most important global player in tackling the financial crisis. FED basically plays a role in providing largest payment system in the world. All the group of tools, used by FED from 2008 to 2012, are considered.
Government bodies all over the world have been hit hard by the 2007 global financial crisis. The UK economy has not been any exception as the condition has become extremely volatile. The economic crisis has proved the enormous monetary loss that is associated with the collapse of the global financial stability, and has enhanced its importance as the stepping stone towards economic growth.
Effectiveness of the Transmission of Monetary Policies and Lessons Learned in 2007 and 2008 Global Financial Crisis
The global financial crisis that occurred between 2007 and 2008 has resulted in various heated discussions among financial analysts regarding the role of monetary policy amidst various central banks in the world (Krugman, 2009).
UK government intervention included injection of considerable financial capital into the private sector in exchange for maintaining a long-run equity stake in the organisations where capital was infused (Simpson 2009). The equity agreement for small banks was 100 percent, with larger banks such as The Royal Bank of Scotland and Lloyd’s at approximately 70 percent; costing the government approximately ?
Water is also important for human body which is made up of 70% water. A person can live without food for several days but water deprivation can kill him in a few hours time. The life of all the living beings is
According to Wallison (2009), key issues that led to the crisis included increment and sudden reduction in house prices as well as increases in default rates in 2006. Furthermore, the collapse of stock prices in 2008 speeded by Bear and Lehman’s failures fuelled the crisis (Wallison, 2009, p. 3).
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