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Subsequently, the bulk off the sloppiness emanate from the irregular investment decisions of that JP Morgan undertook. According to Greenberg and Eavis, managers were admitting the bank has a lower quality of risk management that was not sophisticated enough to cushion it from the $2bn loss. Dimon was adamant that the execution of the hedging strategy was inappropriate and poor.
This revelation of the loss was causing ripples in the Stock markets of the US and did affect the share price of JP Morgan. The loss dented the share value of the investment bank by 9.3% on Friday and for a bank that was previously recording significant earnings, this was shocking to its stakeholders2. The bank has enlarged its credit quantities over several years of trading in profitable investment projects, which were subject to exhaustive monitoring from management. However, recently JP Morgan did not incorporate these stringent measures into the diverse hedging strategies of the bank thus resulting in the disastrous loss in their earnings. In 2007, there was discontent of various stakeholders of the company in the manner The Chief investment Officer (CIO) Bruno Iskil was utilizing the corporations resources in undertaking unnecessary risks.
In addition to the financial woes, the CEO of JP Morgan was suggesting the company could further experience losses of $ 1 billion due to the inevitable economic turbulences. This supposition will increasingly injure the share prices of the bank, which will dwindle further downwards3. This can discourage potential clients from trading in the stocks of JP Morgan since they will be of a lower value. This factor will diminish their confidence and the clients will not be enthusiastic to deposit their savings in JP Morgan. Furthermore, Fitch, a credit rating agency, did downgrade the bank and was affirmative that this decline could extend unless JP Morgan acts upon the
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The increase and decrease of prices are not ordinary because as the movement becomes more persistent, the more it delivers significant number of negative consequences. However, the movement of prices is characterized not just to one but to all commodities.
The third section is an illustration of the implication that an oligopolistic banking sector is likely to have over the residents of a nation. The fourth section depicts the situation in Australia where nationals have been immensely protesting against the oligopolistic banking sector and finally the last section summarises the contents of the entire paper.
The governments now working under the Keynesian approach can specifically use the interest rate to influence certain factors like: increasing (decreasing) exports through the devaluation (appreciation) of the currency, increasing (decreasing) the spending in an economy through inflation and prices.
The basic underlying factor behind the formation and implementation of the policy is to ensure that money itself doesn't act as a tool of economic disturbance. This article highlights various key issues faced by Australia in recent times, and helps in understanding the manner in which the central bank's commitment to price stability helps in maintaining a desired a level of inflation by regulating money supply and helping the economy to grow and prosper.
This increase assisted the producers with the capital required for investments to expand their production capacity so that they could meet the future demand. Since demand is on the rise in industry analysts are estimating long term real prices to be considerably advanced than past prices (Port Jackson Partners Limited, 2006).
Several other researchers observed a positive relationship between education and economic development. Although some of the LDCs are also emerging as newly industrialized nations, the differences in per capita GDP can
issues, various journals and news papers such as The Economist Magazine, The New York Times and The Washington Post facilitates the individuals to acquire information regarding such economic occurrences. In this paper, the debate regarding gasoline taxes in the United States, as
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