The Global Financial Crisis and Its Impact - 1820 Words

1.0 The Global Financial Crisis and Its Impact The recent Global Financial Crisis (GFC) initially began with the collapse of credits and financial markets, which caused by the sub-prime mortgage crisis in the US in 2007. The sub-prime mortgages were given to high-risk lenders (with bad credit history) who were in danger of defaulting, which eventually caused a global credit crunch, where the banks were unwilling to lend to each other. In October 2008, the collapse of the major financial institutions and the crash of stock markets marked the peak of this global economic slowdown (Euromonitor International, 2008). Although the origin of the GFC might have been the housing and financial crisis in the US, it affected both developed and†¦show more content†¦Moreover, if the interest rate maintains its position, the output would decrease even further (Chhabra, 2009). 3.2 Unconventional Monetary Policy Despite that many countries had reduced their interest rate to the lowest possible, a number of unconventional monetary policy have also been applied to face the challenges of the GFC. Quantitative easing and credit easing are the tools of unconventional monetary policy (Ashworth, 2013). Quantitative Easing Under conventional monetary policy, central banks try to boost economies indirectly through cutting interest rates. Quantitative easing occurs when an interest rate has reached its lowest, the central bank decides to increase the size of its reservation to purchase securities from private and public sectors. It forced the interest rate to stay downward and thereby the prices stay high. For the purposes of increase financial market’s liquidity and generate addition loans, central banks also pumping money directly into the market under quantitative easing policy (Murray, 2009). The Bank of Japan first applied to the theory due to a constant deflation in the economy in the beginning of the 21th century (â€Å"What is Quantitative Easing†, 2013). The quantitative easing of the US began in the late 2008, with the announcement that government would purchase a total value of $600 billion of agency debt from the Government SponsoredShow MoreRelatedGlobal Financial Crisis and Its Impact on India4465 Words   |  18 PagesGLOBAL FINANCIAL CRISIS AND ITS IMPACT ON INDIA Abstract: The effects of the global financial crisis have been more severe than initially forecast. By virtue of globalization, the moment of financial crisis hit the real economy and became a global economic crisis; it was rapidly transmitted to many developing countries. India too is weathering the negative impact of the crisis. There is, however, an important difference between the crisis in the advanced countries and the developments in IndiaRead MoreUnderstanding the Impact of the Global Financial Crisis2309 Words   |  9 PagesUnderstanding the Impact of the Global Financial Crisis: An Examination of One Companys Performance Indicators Introduction The global financial crisis of the recent past has been the subject of much commentary, investigation, and debate from people around the globe and from all walks of life. Despite the fact that politicians and armchair policy makers have gone round after round in debates regarding the causes and the ultimate effects of this worldwide economic downturn, the real effectsRead MoreThe Impact Of Global Financial Crisis On Global Growth And Movement2074 Words   |  9 Pageshousing bubble in the US burst and a liquidity crisis began, financial markets around the world were sent into mayhem. The global financial crisis (GFC) had begun, and was setting out to be the deepest recession since the Great Depression of the 1930s. The GFC was resultant from unbridled greed by the bankers including the issuing of risky mortgages, the inability of relatively poor consumers to manage their mortgages, inadequate regulation of the financial system, as well as a long term slowing downRead MoreImpacts of Global Financial Crisis on Hrm Policies8256 Words   |  34 PagesWhat is the role of hr in global crisis to retain the talented employees ? http://www.edalys.fr/documents/Stakeholders%20theory.pdf http://lexicon.ft.com/Term?term=stakeholder-theory Article - 1 Employees are not the most important asset of the company but the â€Å"right† employees are. Human Resource Management (HRM) plays a strategic role in the survival of an  organization. In this time of global financial crisis, Human Resource (HR) managers must not only innovate but must also act as change agentsRead MoreThe Impact Of Global Financial Crisis On The United States Essay1028 Words   |  5 PagesIntroduction The Global Financial Crisis, also known as The Great Recession, broke out in the United States of America in the middle of 2007 and continued on until 2008. There were many factors that contributed to the cause of The Global Financial Crisis and many effects that emerged, because the impact it had on the financial system. The Global Financial Crisis started because of house market crash in 2007. There were many factors that contributed to the housing market crash in 2007. These factorsRead MoreThe Impact of the Global Financial Crisis on Greece Turkey2832 Words   |  12 Pagesof the Athens 2004 Olympic Games and the completion of the construction of major infrastructure projects, Greece has entered a new promising era.   The perfect organization of above major athletic event, which left an excellent impression with the global community, highlighted the enormous possibilities of the country and proved that Greece has gained the trust of big entrepreneurs on the international mar ket, both in tourism and other areas, and gradually is establishing itself as the ideal choiceRead MoreImpact Of Global Financial Crisis And Emerging Markets7336 Words   |  30 PagesRunning Head: IMPACT OF GLOBAL FINANCIAL CRISIS (SP 500) AND EMERGING MARKETS (BRIC) 1 IMPACT OF GLOBAL FINANCIAL CRISIS: DEVELOPED (SP 500) AND EMERGING MARKETS (BRIC) 23 Impact of Global Financial Crisis: (SP 500) Emerging Markets (Bric) Name Institution TABLE OF CONTENTS CHAPTER PAGE ABSTRACT 3 CHAPTERS CHAPTER 1 – Introduction 1 CHAPTER 2 – Methodology 6 CHAPTER 3 –Literature Review 24 CHAPTER 4 – Analysis and Results 38 CHAPTER 5 –Read MoreThe Impact of Global Financial Crisis on the United Kingdom Essays2342 Words   |  10 PagesThe impact of global financial crisis on the United Kingdom Introduction This report will examine the affects of the global financial crisis, which was a result of the collapse of the sub-prime mortgage market in the United States, on the UK economy. First of all, it will look at the background of the global financial crisis. Secondly, this paper will analyses why the UK economy has been influenced by the global financial crisis, what effects of the financial crisis on the United Kingdom haveRead MoreThe Global Financial Crisis Of 2008-10 And Its Impact On The Financial Health Of The Institutions999 Words   |  4 Pages The Global financial crisis has been described as the worst financial crisis after the Great Depression of the 1930’s. This was a Financial Crisis and affected terribly the banks of the United States of America. The banks during this time had low capital base and suffered from a serious liquidity crunch. Leveraging was very common at this time. This increased financial instability of the banks called for major changes in the financial regulations by the government. This essay will discuss theRead MoreEssay on The Impact of the Global Financial Crisis on Economic Growth4072 Words   |  17 PagesEconomic growth The impact of the Global Financial Crisis on economic growth As a result of the global recession, Australia’s GDP was forecasted to contract by 0.5% in 2009-10 in comparison to other advanced economies which were expected to contract by 3.75% in the same year. However minor the reductions in GDP, it was evident that Australia was not exempt from the global recession although is better placed and is expected to perform better than almost all other OECD economies. The global recession has