Effects Of The 2008 Financial Crisis - 1030 Words

The effects of the 2008 Financial crisis were felt globally, it being the worst financial crisis since the Great Depression of the 1930s. Suggested in the documentary Inside Job shown in class, there were many factors which led to the 2008 Financial crisis. To better understand how it happened, we have to look back to the Great Depression of the 1930s. The Great Depression was the deepest and longest worldwide economic downturn in the 20th century. For fear of another economic collapse, strict regulations were put in place upon the financial industry. This heavy regulation persisted up until the Reagan Era in the 1980s. Hoping to spur economic growth the financial institutions on Wall Street and politicians in Washington wanted to deregulate the financial industry, which had been steadily growing for little over 50 years since the depression. President Reagan ushered in his economic policies starting the unregulated era that eventually led to the 2008 financial crisis. In the early 2000s, investors were seeking good investments. Traditionally investors would purchase treasury bills from the Federal Reserve Bank, considered to be the safest investment. However, in the wake of the dot-com bust and September 11th, Allen Greenspan, the Chairman of the Federal Reserve, lowered interest rates on loans to 1% to keep the economy strong. For Investors, 1% is a very low return on their investments, so they sought out new ways to invest. For years prices in the US Housing Market hadShow MoreRelatedEffects Of The Financial Crisis Of 2007-20081763 Words   |  8 PagesFinancial crisis of 2007-2008 is widely considered to be the worst financial crisis since the Great Depression of 1930s. The origin of this big storm dated back to the high home prices of the United States. After America’s entire investment banking system was attacked, many industries such as auto industry also went bankrupt. Unfortunately, it spread quickly to the whole world, causing hug e damages to the global economy. Therefore, my study will focus on the effects of the financial crisis of 2007-2008Read MoreWhy India Recovered Quickly From The 2008 Global Crisis Essay1594 Words   |  7 PagesIndia recovered quickly from the 2008 global crisis? Vivek Shah MBA AF 629 December 12, 2016 Introduction It’s the most heard term about the global economy in the recent years and it’s the year we have been always hearing about its 2008. We all have been a part of it in some or the other way and all the major economies had been affected by the global turmoil which eventually lead to the worst situation after the Great depression of 1929. The sub-prime crisis in USA which lead to great recessionRead MoreThe 2008 Financial Crisis Essay1326 Words   |  6 Pagesintroduction The 2008 financial crisis led to a sharp increase in mortgage foreclosures primarily subprime leading to a collapse in several mortgage lenders. Recurrent foreclosures and the harms of subprime mortgages were caused by loose lending practices, housing bubble, low interest rates and extreme risk taking (Zandi, 2008). Additionally, expert analysis on the 2008 financial crisis assert that the cause was also due to erroneous monetary policy moves and poor housing policies. The federal governmentRead MoreBanking of Uk1564 Words   |  7 Pages1. The financial crisis of 2007/2008 and its impact on the UK and other economies Do you still feel vague about the causes and the effects of the financial crisis of 2007/8? Are you preparing for a job interview in either the private or public sector? The events of 2007/8 have shaped both the current UK commercial and business scene and are now having a massive effect on the public sector. Similar impacts are being felt across Europe and the wider world. Knowing a bit more about what happenedRead MoreFinancial Crisis Of A Single Country1671 Words   |  7 Pages Table of Contents Summary 2 Financial crisis 3 Impact of financial crisis 4 Effect of financial crisis on different on the economies of different countries 5 Mathematical problems 6 Conclusiom 8 References ..................................................................................................................................................9 Summary Financial crisis has long been a part of global economic recession throughout the history. Here, the purpose of this assignmentRead MoreFactors That Affects The Global Economy And Its Impact On The Nigeria And Egypt Economy1568 Words   |  7 Pageseconomy. In 2007, the financial crisis, which later extended to the global financial crisis began in the United States of America. The origin and elements of the 2007/2012 global financial crisis have been widely discussed in the literature throughout the period. The aim of this work is to, however, try to point out the reasons and also the macroeconomic effects of the financial crisis in both countries economy and the resulting policy responses. Nevertheless, the impact of this crisis on the real economyRead MoreFinancial Crisis : The Fiscal Crisis1355 Words   |  6 Pagessecond week of October in 2008 was the worst week for stock market during 75 years, Buckley (2011) state that the worst record was the Dow Jones Industrial Averages d ropped 22.1%, but it fell 44.3% then. In general, a financial crisis is not an accident; it may take several years and has complex and interlaced causes (Claessens and Kodres, 2014). The 2007-08 global financial crisis is a typical case due to long-term non-intervention policy and loose regulation for financial market from government.Read More2008 Financial Crisis: the Large Financial Institution Failed1059 Words   |  5 Pageseconomy experienced a deep recession in years of 2008 through 2009. A huge factor in this was the number of large financial institutions that failed. Also, the stock market declined significantly which can be contributed to the bailout plan that was passed by our government. Third, spreads on many different types of loans over comparable U.S. Treasury securities has expanded significantly (Chari, Christiano, amp; Kehoe, 2008). The financial crisis is the result of the collapse of the housing bubbleRead MoreModern Egyptian Economy1526 Words   |  6 Pagesta rgeting inflation, the world financial crisis of 2008 and the 25th of January revolution in 2011. With many incidents hitting the economy, accompanied by several monetary policies, the question that came to a rise is, had these policies been effective in inflation targeting and regulating of exchange rate? And what were the main effects of such policies? This paper will analyze the policies and their economic effect as well as the effects of the economic crisis of 2008 and the 25th of January revolutionRead MoreThe Downfall Of The Subprime Mortgage Market1716 Words   |  7 Pagesboom, the subprime mortgage market enhanced the revenues of lenders, investment bankers and investors alike. While some knew the trend would come to an end many did not. When the housing bubble burst and home prices declined the effect on those involved was enormous, financial institutions who originally had low debt to equity ratios, soon found themselves on the cusp of bankruptcy. Housing Bubble Due to the U.S. Governments relaxed lending stipulations and low interest rates, the demand for houses