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.
Nobody downloaded yet

Financial Crisis Assignment - Case Study Example

Comments (0)
The whole world was slowly sinking into a financial crisis by the end of 2007 that showed its true destructive colors in early 2008 and 2009. The financial crisis of the late 2000’s has been labeled as the worst global recession since the Great Depression of 1930’s…
Download full paper
Financial Crisis Assignment
Read TextPreview

Extract of sample
Financial Crisis Assignment

Download file to see previous pages... Its effects were far reached and almost everyone on the globe was impacted by it on some level. Those who were closer to financial markets and deeply involved in the investment business faced greater impacts and are still incurring huge losses. This crisis raised questions that pointed fingers on the functioning of the global financial markets. The liquidity crisis was triggered by a bunch of policies that were implemented by the United States banking system to promote massive investment and growth in the economy. Nevertheless, what started as an attempt to increase consumer spending and encourage investor confidence soon turned out to be the underlying weakness in the financial system. The imbalance in the global economy became too massive for any individual government to control and with the passage of time it only worsened. A critical part was played by the developed economies whose excessively loose monetary policies during the early part of this decade contributed in widening the gap between the West and the East. It is very interesting to know that the budget deficit of the United States was at an all time high during 2006-2007, while on the other hand huge surpluses were being recorded in Asia, particularly China and other oil exporting countries of Middle East. If we look at figures they reveal a clearer picture, the current account balance as a percent of GDP for US was -4.7%, while for China, Saudi Arabia, Russia and UAE was 10%, 28.9%, 6.1% and 15.8% respectively. Analyzing the figures it clarifies that even after the West was generating billions of dollars in revenue, the global net flow was concentrated towards the Eastern giants as they were becoming powerful by the day. This can be strongly attributed to the fact that the gap between the saving-investment function was extensive and this gap was only widening with time since developing countries started relying more heavily on developed economies to provide for their development expenditures. There were some direct impacts of these huge cross-border financial flows on the financial intermediation process. (Mohan) One of the major causes of the crisis is attributed to the sub-prime lending in the housing industry in America. In order to increase the share several banks gave loans to individuals who were doubtful of paying back their installments in the future. Nevertheless, since in the short run it would show an artificial boast in the economy along with a positive growth of the company many bankers and financial institutions to fulfill their personal interest gave top notch credit ratings to doubtful individuals. This resulted in a massive spending in the housing sector even though it was clear this was only short-lived. Banks gave loans on negligible interest rates at times even below 1%, showing the extent of how eager they were to raise their customer base. The financial sector was involved in a personal struggle to widen its customer base. Derivates were used to inject huge sums of money from the investors in the market, but these derivatives were passed on to other investors and so on. The original derivative holder had no idea who was in possession of his derivative as it was a long chain that no one was aware of. The derivative market surpassed the whole US GDP number and according to estimates in 2010 the US GDP stood at $14 trillion dollars compared to the $300 trillion derivative market. It is apparent that the market was financially diluted and ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
In 2007 and 2008, the United States experienced a significant volume of defaults on sub-prime mortgage loans that was caused by high inventories of homes available on the consumer market that created incentives for lenders to offer mortgages to individuals without necessarily sustaining good credit or adequate financial resources.
8 Pages(2000 words)Case Study
South Korean Financial Crisis
The year 2007 marks the 10th anniversary of the South Korean financial crisis and reminds us of the struggle that shocked the Korean economy in the last quarter of 1997. Undoubtedly, this had a significant impact on the South Korean economy and led to Korea’s worst recession since the aftermath of the World War 2.
6 Pages(1500 words)Case Study
International Finance and Financial Crisis
In an outstanding work on the ways of handling the crisis by an organisation, Dominic Barton and his co-authors (Roberto Newell and Gregory Wilson) prescribed five ways of handling financial crisis (Barton, et al., 2002, pp.90-108). Understand and maximise the current cash positions - In the theory it is prescribed that the outset the company should have a clear understanding of its present cash position.
18 Pages(4500 words)Case Study
Financial Accounitng Assignment
b. If Lucy's uncle become a partner in the company and Lucy purchases all the shares, then the situation will be changed. In this case, Lucy's uncle will be a partner in the firm, hence the financial statement will show all funds as capital injected by the owners, and not as debt.
3 Pages(750 words)Case Study
Managing Resourcing Strategy assignment-2
Human resource managers usually have the authority to keep employees aligned with the organization’s overall business objectives, strategies, and goals. In line with this, having a competitive human
6 Pages(1500 words)Case Study
Financial Crisis 2007-09
The financial collapse was worsened by the financial institutions ability to use the loopholes existing in capital regulation. Banks increased debt while maintaining their capital requirements. This was made possible by moving assets into special
1 Pages(250 words)Case Study
Tesco Case Study Assignment
In this regard, the case of Tesco has been analyzed in details. Tesco is currently the market leader among other major companies like, ASDA and Sainsbury’s, in the domestic market. The strategic practices adopted by the company have been
15 Pages(3750 words)Case Study
Crisis Management
The nature of the patient’s symptoms determines the way one will handle the situation and the way to help the patient who may be affected physically and also emotionally (Jankowski, Sampliner, Kerr, & Fong, 2009). The nurse should always try to give hope to the
8 Pages(2000 words)Case Study
Financial crisis 2008 for corporate governance & ethics course
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
2 Pages(500 words)Case Study
The crisis is largely attributed to increased mortgage defaults that apparently mushroomed after securitization, an innovation that was envisioned to improve the performance and operations of the
4 Pages(1000 words)Case Study
Let us find you another Case Study on topic Financial Crisis Assignment for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us