Credit Crunch in the UK - Case Study Example

The paper "Government Cutbacks – Why Are They Necessary and What Might They Do to the uk Economy" highlights that the OECD's secretary general has appreciated the policies of Osborne, though she warned that it would suppress the demand for a few years (Stewart, 2011).... According to Cameroon, the level of debt and the credit crunch are the main causes of the recession.... % (uk interest rate held at a record low of 0....

The tradition within the banking sector in the uk has been one of the risks taking type that lead to its ultimate failure.... For example in the uk the government nationalized many banks and took over some by buying through common stock.... Common stock gave them the right to owner ship of some of the largest banks in the uk like Royal Bank of Scotland and Lloyds (Giudice, 2012).... Under this scheme the government agreed to finance the largest banks in the uk by injecting ?...

The financial crisis although has not created problems in the uk constitutional system, nevertheless has proved that the constitution lacks flexibility to cope with financial crisis of such mammoth proportions (Black, 2010, p.... the uk economy has not been any exception as the condition has become extremely volatile.... the uk economy has not been any exception as the condition has become extremely volatile.... the uk government has embarked on a number of missions to sustain the financial sector and the overall economy....

Growth in the uk economy was 3.... Some analysts felt rumours about a possible recession were highly speculative as the growth in the uk economy was well above the target.... The year 2007 was a year of surprises for the uk economy.... the uk economy fared really well as per the market expectations.... the uk economy was able to make significant headway despite harsh market conditions.... The tentacles of subprime crises choked the progress of the uk economy to some extent and forced an interest rate cut....

One of the new aspects which I learnt about was the letter of credit and how the credit crunch in the US, UK and other developed nations was affecting the economic institutions of China.... It has received wide recognition from its peers, customers and authoritative media for the credit and performance it achieved in past years.... Undoubtedly, I made a lot of profit along with a few loses due to the credit crisis....

Banking stocks suffered huge losses while it was already paralysed with the credit crunch.... The reason for poor lending may be due to lesser demand for credit owing to recession or the relunctance of banks to offer loans.... The decline in borrowing is a risk since the recovery of the economy would require more credit for the revival of businesses (Pimlott, D.... The government has served guidelines to increase the accessibility of banks to liquid assets that is equivalent to cash to face potential credit deficits and to reduce the risks while dealing with shareholder's money....

But with the rise of military expenditure in 1950 in Korea, the uk government had to take a deficit budgetary policy that led the amount of deficit to reach to almost 4 percent of GDP in 1953.... The author of this coursework "Key Concepts of Economics Environment" describes the term budget deficit in an economy....

Prior to the period of recent financial crisis, it was apparently seemed that the system is quite effective in maintaining the stability in the uk financial system.... This research mainly focuses on the Tripartite Financial System and its role in the recent credit crunch in UK.... The specific research statement is “how tripartite financial system was created in UK and its part in credit crunch”.... This research is all about the Tripartite Financial System which was developed in uk in 1997....