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Financial Markets Under Different Economic Situations - Essay Example

A move dubbed ‘compounding of the market’s worries’ equally triggered various reactions from different financial leaders and institutions with some pulling out of the impending market hitches. One example of such players is the Chinese government that decided to close the lending by various banks, a move that saw the People’s Bank of China improve due to increased yields and capital retention. In a surprise rejoinder, Sir Mervyn elucidated on the market trends and the future prospects of the financial institutions by claiming that there was no guarantee that the soaring interest rates would come back to normalcy in the near future. This clearly demonstrated the turbulent nature of the financial markets that have a tendency and a possibility to choose any financial trajectory whereby it would be almost impossible to predict the future of the stock markets. The Federal Reserve had committed itself to easing the market crisis, it was skeptical about the possibility of the market to stabilize without further fluctuations, as these significantly depended on the prevailing economic conditions. Although virtually all financial institutions and corporates were eager to see a drastic change in the market conditions, there can never be any tangible results unless there is a change in the market environments. This simply means that if sustainable economic recovery were to be realized, then the markets ought to have enacted policies that would see a reduction in the interest

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rates and subsequently housing bonds....
Although virtually all financial institutions and corporates were eager to see a drastic change in the market conditions, there can never be any tangible results unless there is a change in the market environments. This simply means that if sustainable economic recovery were to be realized, then the markets ought to have enacted policies that would see a reduction in the interest rates and subsequently housing bonds. This would have had tremendous economic implications particularly on the financial institutions such as commercial banks whose performance index heavily depend on the nature and level of interest rates charged. In acknowledging the fact that ‘markets tend to test and change things’, the president of the Federal reserve categorically stated that large amounts of money do not have the capability to reorganize but instead follow any weak points in the financial markets, an attribute directly related to the credit crunch that was at its peak at that particular time. Indeed, it is the duty and responsibility of the financial institutions and the relevant bodies to institute policies that regulate the interest rates so that the rates do not rates do not exceed the projected figures. In order to ease the fixed liquidity situation and the fluctuations of the interest rates, it is imperative to exclude emotional and seasonal factors, as clearly stated in the statement issued by the Chinese Central bank. This is especially so because when dealing with the stock exchange market where there is constant fluctuations in various economic factors. Although many financial leaders made many promises about destabilizing the market, the anxious financial institutions had to adopt a wait and see attitude as the unpredictability of the market seemed


An essay "Financial Markets Under Different Economic Situations" specializes that most of the financial institutions had the fear factor because this imminent danger had not occurred in two consecutive years and the stock market had just begun to regain its vigor…
Financial Markets Under Different Economic Situations
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taliarippin added comment 4 months ago
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At first, I thought 3 of pages is too much for such a question. But now I see it could not be done smarter. As the author starts you see the difficulty of the question. I’ve read all at once. Terrific essay
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