StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

How capital markets led to the new economy bubble and the banking crisis - Essay Example

Comments (0) Cite this document
Summary
The idea of this research emerged from the author’s interest in how capital markets led to the ‘new economy’ bubble and the banking crisis. The researcher tells how the crisis would have been avoided with adequate regulations on lending and government policies…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.2% of users find it useful
How capital markets led to the new economy bubble and the banking crisis
Read TextPreview

Extract of sample "How capital markets led to the new economy bubble and the banking crisis"

Download file to see previous pages This research will begin with the statement that the occurrence of the global crisis in 2008 started with developed countries particularly in the United States of America, and its impact spread rapidly to other parts of the world. The crisis was contributed by the negligence of the financial institutions that issued insecure loans to the investors hence making the repayment hard during and after the recession. The decline in the prices of residential houses made it difficult for mortgagees to repay their debt. Consequently, the investors withdrew their wealth from the capital market to repay their loans with other investors lost trust and confidence with financial institutions resulting to the withdrawal of invested wealth from the capital market. Capital market refers to the financial market in which the long-term debt or equity-backed securities are traded. The role of the capital market is to collect resources of the savers and distribute them to the long-term investment opportunities, especially in government and companies’ investment saving schemes. This document gives the detail of how the capital market was responsible for the global crisis and its impact on the world economy. The contribution of the capital market to global financial crisis gives and understanding of the financial markets operates and how different financial institutions are interlinked across the globe. During the period between 2000 and 2007 investors generated a lot of wealth and had enough to save in the banks. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“How capital markets led to the new economy bubble and the banking Essay”, n.d.)
How capital markets led to the new economy bubble and the banking Essay. Retrieved from https://studentshare.org/management/1633802-critically-discuss-the-view-that-capital-markets-created-the-conditions-that-led-to-the-new-economy-bubble-and-the-banking-crisis
(How Capital Markets Led to the New Economy Bubble and the Banking Essay)
How Capital Markets Led to the New Economy Bubble and the Banking Essay. https://studentshare.org/management/1633802-critically-discuss-the-view-that-capital-markets-created-the-conditions-that-led-to-the-new-economy-bubble-and-the-banking-crisis.
“How Capital Markets Led to the New Economy Bubble and the Banking Essay”, n.d. https://studentshare.org/management/1633802-critically-discuss-the-view-that-capital-markets-created-the-conditions-that-led-to-the-new-economy-bubble-and-the-banking-crisis.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF How capital markets led to the new economy bubble and the banking crisis

Reasons for the recent global financial crisis

...? Reasons for the recent global financial crisis Introduction The cause of the recent financial crisis and economic recessions has been attributed to various factors in the economy (Freedman 2010). The initial trigger of the financial crisis has been traced to the toxic mortgage backed assets whose decline in value and uncertain duration led to massive losses in the U.S economy. Fannie Mae and Freddie Mac were both taken over by the US government. Lehman Brothers was declared bankrupt since it could not increase its capitalization (Joseph 8). Merrill Lynch was bought by the Bank of America while American International Group (AIG) was rescued by the Federal government through an $ 85 billion capital bailout. Washington Mutual... which is...
8 Pages(2000 words)Essay

International Banking Law and Capital Markets

... issues. The aims of framing such rules are to protect the world economy from futuristic chaos in the financial sector. The committee’s aim to minimize the risk of banks, so that the governments will not come forward for the rescue of the banks and their depositors18. The new rules will look into the successes and the failures of the financial sector in implementing the Basel II to counter the global financial crisis. Under the Basel II, the banks have to hold a big chunk of capital and more liquid assets as buffer to meet the unforeseen challenges in the days ahead. Bankers repose confidence in the newly introduced banking system who believes that changes are always better. Mr. Mervyn, the Governor Bank of England, is of the view... of...
16 Pages(4000 words)Assignment

Capital Markets and Investment Banking Process

...? CAPITAL MARKETS AND INVESTMENT BANKING PROCESS Table of Contents Table of Contents 2 Investment Banking Process for an IPO 3 Asset Selection for an Investment Portfolio 4 Capital Market Instruments Used in Portfolio Construction 5 Conclusion and Recommendations 6 References 7 Investment banking plays a vital role in today’s economy. This study is focused on the role played by investment bankers in the IPO process of a company and how it functions during the issue of shares made by the companies to the public. Next, the various factors related to the selection of asset classes while...
5 Pages(1250 words)Essay

Capital Markets and Investment Banking Process

...Capital Markets and Investment Banking Process Investment Banking Process: Investment banking has no features like the traditional banking. Investment banks are involved in public and private market transactions for investors, companies and governments. Investment banks advise and assist its clients in issuing of debt and equity securities, mergers, acquisitions, diversification etc. Investment banker’s services are acquired when a company needs to raise funds in the financial markets usually through the issuance of new securities. Investment...
4 Pages(1000 words)Essay

Banking Crisis

...of homes and other properties were left with the banks at rates much lesser than what they paid for through the mortgage system. This entire phenomenon led to the current Sub-Prime crisis that triggered a chain reaction resulting in an overall economic crash. The Federal Government showed gross negligence about this new loan cycle and the process of credit risk management and later fuelled the crash further by desperate bail-out attempts of banks that resulted in further loss of good money burnt in bad debts of the Banks. Also the banks did not raise timely alerts due to perception of losing reputation and indulged in...
20 Pages(5000 words)Essay

Critically discuss the view that capital markets created the conditions that led to the new economy bubble and the banking crisis

...Analysis of how Capital Markets Helped in Creating the Conditions that led to the “New EconomyBubble and the Banking Crisis : Tutor: Date: Analysis of how Capital Markets Helped in Creating the Conditions that led to the “New EconomyBubble and the Banking Crisis Introduction The collapse of the Lehman Brothers in September 2008 is considered to have singularly triggered a financial crisis that nearly brought down the world’s financial system. Lehman Brothers was one of the largest banking organizations with branches spread out across the world. In attempts to try and shore up the industry, governments across the world were forced to inject huge amounts of taxpayer-financed bailouts (Hemerijck 2009). Despite all these measures... , the...
8 Pages(2000 words)Essay

Critically discuss the view that capital markets created the conditions that led to the new economy bubble and the banking crisis

...A Discussion on the View that the Capital Markets Created the Conditions that Led to the ‘New EconomyBubble and the Banking Crisis Introduction In the writings by Choudhry (2001), he described capital markets as a place where the sale and purchase of equity and other debt instruments such as bonds and stocks, take place. It is important to note that the transactions are usually grouped into long-term transactions such as the purchase of bonds and short-term transactions like the transaction on company shares, which are easily tradable. In the studies undertaken by...
8 Pages(2000 words)Essay

Critically discuss the view that capital markets created the conditions that led to the new economy bubble and the banking crisis

.... These markets usually channel the wealth of the savers to those who have the capability of putting it into long-term use. The paper will offer evidence supporting the view that capital markets created the conditions that led to the ‘new economybubble and the banking crisis. Discussion According to a view shared by Rudd (2009), prescriptions of the neo-liberal policy flow from the major theoretical belief in the superiority of unregulated markets, especially unregulated capital markets. These claims is based on the...
8 Pages(2000 words)Essay

Critically discuss the view that capital markets created the conditions that led to the new economy bubble and the banking crisis

... business and large company owners with capital, which is a vital component for enabling economic growth and development. This essay aids, to discuss the view that capital markets created the conditions that led to the “new economybubble and the banking crisis. Difference between old and new economy firm Old economy firms were or are large, well established firms that operate in a form of traditional sector. Old economy firms have small investment and less involved in the current technology era (Torre & Schmukler 2007, p. 88). These old economy firms were the ones, which dominated the entire economic activities before the introduction of the dotcom epoch. The current dotcom era ushered in the economy back in the 1990s, leading... ...
8 Pages(2000 words)Essay

International Banking Law: Capital Markets and Loans

... was initiated by the two graduates with the help of bank loans and through the financial support from the wealthy individuals as an initial capital for the business. However after the successful trading of the company for a period of two years the company requires funds in order to expand the business. The fund would help the company to increase the capacity of its manufacturing in order to reach more market. In order to meet the fund requirement of the business, Emma and Dan are planning to raise funds by issuing bonds to the marketer or to the wealthy individuals. However, in order to produce bonds the company needs to have few documents in order to market the bonds wherein the prospective of the business and future prospects... is...
16 Pages(4000 words)Essay
sponsored ads
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.

Let us find you another Essay on topic How capital markets led to the new economy bubble and the banking crisis for FREE!

Contact Us