Download file to see previous pages...
The problem started from largest and most influential economy in the world the United States, owner of the international traded currency the US dollar.
In my view governments have in most part just made temporary fixes in managing the global financial crisis. The problem will definitely return with a vengeance, with massive increase in public debt in almost all developed economies, which can definitely initiate the next phase of the global economic crisis. We are in the middle of a full-blown sovereign debt crisis that will create more mayhem on the global financial system than the problem that started 3 years ago. Global economic climate changes too rapidly and the circumstances are complex, providing a real challenge for those who intend to effectively resolve and police these problems (Torbat, 2008).
With the help IMF we need to better regulate the worlds financial system and avoid a repeat of the global credit crisis, with uniformed global financial regulations and joint surveillance of international financial markets. Industrialized nations should learn from the East on ways to tighten rules in the US and Europe. As most of these economies have been able to withstand the financial crisis, and in fact have been to grow at high single digits. As China and India werent fully integrated into the global financial system and followed stricter guidelines and regulation, which we can see, have helped them tremendously.
The international monetary community can learn that they need to be ready and the ability to prevent a financial crisis. The countries need wise macroeconomic policy and effective financial regulation and supervision. Global financial bodies like the IMF need to put in place a framework to facilitate international supervision and regulation as well as crisis prevention, management, and
...Download file to see next pagesRead More
Student Name: Course: Instructor Name: Date of Submission: Financial Upheavals Financial crises are inevitable and seem to be a usual and reasonably invariant characteristic of such business cycle. The economic system of any country is subject to discrete business cycles that lie on the boom-depression continuum.
According to this discussion the banks and the financial institutions suffered from the crisis. The governments of almost all the nations had to come up with packages that are required to move out from such a situation. The financial crisis will shed its impacts around the globe due to globalization.
In September 2007, the US Department of Labor had released their jobs report which stated that not only there are no growths in the jobs rate, but also 4000 people had already lost their jobs by then due to the business environment. In the year 2007, the analysts already started warning the investors that in USA that the market was on the verge of a severe credit crunch.
Global Financial Crisis of 2007 had its beginning in United States of America with the crash of the home loan or credit market during July 2007. This credit crunch which happened in United States during 2007 rapidly spread to other global economies thus jeopardizing the global financial system.
Many have assigned the year 2004 as the year of the great credit crisis that first had a toll on the United States’ financial sector before other parts of the globe had its impact. However, there are indications that the credit crisis of the year 2004 was just a climax of a historically influenced turbulence in the world’s financial market that began with the end of “the golden age of capitalism in 1970’s” (Kapadia and Jayadev 33).
One of the most significant causes of the financial crisis disclosed by the author is the market instability. This was related with the poor credit lines which had deteriorated the money supply while limiting the economic growth. Individuals and businesses were unable to pay back their loans which also affected the assets and cash reserves.
The moral code implies an accepted rightness or wrongness in behavior. However, the rightness or wrongness in behavior largely varies across different cultures in the world. Therefore, the business which operates in a diverse cultural background faces sever ethical challenges.