Essay on Overview of the Recent Financial Crisis in the US

1. Introduction The financial crisis started in the USA because of subprime mortgage crisis in 2007. As a consequence of it, a credit crunch was originated and it quickly spread from the real state sector to other sectors, and furthermore, from USA to other countries. This caused a series of financial and economic crises like the collapse of housing markets in Europe, the global stock markets, global financial systems and markets, along with a lot of large banks and financial institutions, as (Sun, et al., 2011) explained. The financial crisis from 2007 has caused the greatest global economy recession since the Great Depression and also the European sovereign debt crisis. The consequences and cost are enormous. Due to this fact,†¦show more content†¦Executive incentives also took part in boosting risk, which illustrates as well the irresponsibility of the companies. However, the causes of the global financial crisis are rather complicated. On 15 November 2008, (Leaders of G20, 2008) declared that the financial crisis was caused by: †¢ Market participants seeking higher yields without an adequate appreciation of the risks and failing to exercise proper due diligence. †¢ Weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. †¢ Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions. †¢ Underlying factors such as inconsistent and insufficiently coordinated macroeconomic policies and inadequate structural reforms which led to unsustainable global macroeconomic outcomes. These developments contributed to excess and ultimately resulted in severe market disruption. The main theme in (Leaders of G20, 2008) to explain the origins of the financial crisis is strongly connected to financial risks, product risk (innovative financial products through securitization processes), system risk (week financial systems), market riskShow MoreRelatedPrivate Equity, Significant Part Of Alternative Investment1044 Words   |  5 Pagesmany existing literature and supporting research in this area private equity performance is still uncertain. The main purpose of this work to investigate and overview available literature and recognise main issues in investment policies of us private equity funds. To overview industry as a whole and compare results of two main companies in US market. To learn the concept of investment policies of private equity secondary sources will be considered and analyzed. Due to several challenges as cash flowRead MoreBond Market Trends1156 Words   |  5 PagesTopic 2 Bond market developments Overview Financial markets have been subject to significant changes in recent years due to the credit crisis. Experts believed that risk was being under-priced, which was expressed in the markets by a narrow spread. They believed that once the market corrected this under-pricing and re-priced the risk, it would likely cause a dislocation in financial markets by overshooting its equilibrium. Hence the prices, yields and returns on bonds have been significantlyRead MoreThe Ascent Of Money By Video Series733 Words   |  3 Pagesâ€Å"The Ascent of Money† video series is a quick overview of the history of money, currency and financial markets development. According to Harvard University Professor Neil Ferguson, money is a relationship built on trust between the lender and the borrower. Money can take many forms like clay, different goods, bonds, stocks, coins or paper bills. It causes greater threat to our prosperities. It is one of the tools of business that can â€Å"make us or brea k us.† Most of our money we do not even see, as majorityRead MoreAn Evaluation of South African Economy and the Countrys Growth Rate in the Past Five Years1581 Words   |  6 Pagesevaluate the country growth rate within the past 5 years. The balance of payment (BOP) is a statistical tool that provides a systematic summary of South African economic transactions with other countries of the world. One of the major economic and financial tools to evaluate countrys economic performances is the balance of payment and BOP is the record of all economic transactions between a country and all other countries in given a year. Balance of payments is the key economic indicator that showsRead MoreThe Wealth Management Insudtry968 Words   |  4 Pages3.3 Short-comings of the Industry The wealth management Industry in Australia faces some major challenges that can hinder its growth in the future. Following the financial crisis, the industry has witnessed a sea change in terms of regulations, risk, increasing costs and the overall profitability of the industry. Investors are now far more demanding of their wealth managers. At a time when returns are low, assets have suffered losses and trust has been damaged, clients are far less willing to takeRead MoreInflation and Currency Risk644 Words   |  3 PagesChapter 1: Research Overview 1.1 Background of the Study Inflation and currency risk is the possibility that the value of assets or income will decrease as inflation shrinks the purchasing power of a currency. Inflation causes money to decrease in value at some rate, and does so whether the money is invested or not. Malaysia is part of the worldwide emerging market where the country aims to achieve the status of a developed country by the year 2020, however, the increase in inflation and currencyRead MoreAnalyzing The Trends And Emerging Challenges Of India s Balance Of Payments Essay1406 Words   |  6 Pagesthe trends and emerging challenges of India’s Balance of Payments. GLOBAL ECONOMIC ENVIRONMENT Global economic recovery appears to have strengthened in recent months and is expected to further improve. The recent uptick in global growth is mainly concentrated in advanced economies and some emerging market and developing economies. The easier financial market conditions and gradually improving consumer and business confidence have supported growth. Stronger external demand from advanced economies wouldRead MoreThe Global Financial Crisis and The Regulation of Investment Banks1154 Words   |  5 Pagesroles. Investments banks play a very important role in stimulating investments in the United States both from individuals and corporate. The global financial environment has over the last decade experienced enough changes as can be witnessed from the key economic indicators. These changes have significantly impacted various stakeholders such as financial markets, money markets, capital markets and the general micro and macro economics players. Countries have been hit by recession and economic meltdownsRead MoreEffects Of Oil Prices On The American Economy1528 Words   |  7 PagesAbstract This research paper provides an overview on why there is oil price falling in the United States. It will examine the reasons that are influencing fall of oil prices. Additionally, the paper will seek to explore the effects caused by the fall of oil prices in the American’s economy. Introduction In the recent months, the prices of crude oil have dropped from 140 dollars per barrel to 60 dollars a barrel in the latest date. To begin with, there is technological revolution in the energyRead MoreOverview Of Palliative Care Services1588 Words   |  7 Pageshead: OVERVIEW OF PALLIATIVE CARE SERVICES IN CANADA 1 Overview of Palliative Care Services in Canada Jamie Organ Student Number: 0567596 Professor: Ms. J. Bertoni Lakehead University GERO 2010: Introduction to Palliative Care October 23rd 2015 OVERVIEW OF PALLIATIVE CARE SERVICES IN CANADA 2 Overview of Palliative