...“How Mortgage Crises in United States has affected Turkish Real Estate Sector?” Muhammet Çağlar Kılınç Cansu Sugün The U.S Mortgage Crises was characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages. This caused an economic recession and in 2008-2012 it is called Global Recession due to the negative effects in the global sense. There are number of factors that lie behind these crises in both housing and credit markets. These factors emerged over a number of years. Causes proposed include the inability of homeowners to make their mortgage payments, overbuilding during the boom period, risky mortgage products, increased power of mortgage originators, high levels of debts, bad monetary and housing policies, international trade imbalances, and inappropriate government regulations. In January 2011 The U.S Financial Crises Inquiry Commission reported its findings. It concluded that "the crisis was avoidable and was caused by: Widespread failures in financial regulation, including the Federal Reserve’s failure to stem the tide of toxic mortgages; Dramatic breakdowns in corporate governance including too many financial firms acting recklessly and taking on too much risk; An explosive mix of excessive borrowing and risk by households and Wall Street that put the financial system on a collision course with crisis; Key policy makers ill prepared for the crisis, lacking a full understanding...
Words: 2117 - Pages: 9
...Even without the global recession, Spain's economy likely would be going through a rough patch now due to the country's overheated housing market; with the recession, it is also suffering from a banking crisis and an industrial slump. Analysis Spain's unemployment rate rose from 13.9 percent in the fourth quarter of 2008 to 17.4 percent in the first quarter of 2009, increasing the ranks of the unemployed to more than 4 million, according to National Statistics Institute (INE) figures released on April 24. Spanish Economy Minister Elena Salgado said that the first quarter of 2009 will be the worst in terms of increasing unemployment. The International Monetary Fund (IMF) predicts that unemployment in Spain will reach 17.7 percent in 2009 and 19.3 percent in 2010, but the INE figures seem to indicate that unemployment could exceed 20 percent by the end of 2009. Of all the European countries, Spain has in many ways been one of the most gravely affected by the global economic crisis. Even without the global recession, Spain would most likely be undergoing a correction this year due to its extremely overheated housing market. But it is facing a severe housing market correction, an industrial slump, and a banking crisis caused by the housing correction and the recession's overall effects -- simultaneously. These three ingredients make for one bitter stew. As the first large Western European country to be severely tested by the crisis, Spain can serve as a case study for the other...
Words: 2276 - Pages: 10
...“New trends of Middle East Economy” Middle East Economy Background Main economic sectors & main actors Current trends with alternative investment apart from oil industry” by Panakant Raschasri 5303640691 Middle East Economy Background The economic structure of Middle Eastern nations are different in the sense that while some nations are heavily dependent on export of only oil and oil-related products (such as Saudi Arabia, the UAE and Kuwait), others have a highly diverse economic base (such as Cyprus, Israel, Turkey and Egypt). Industries of the Middle Eastern region include oil and oil-related products, agriculture, cotton, cattle, dairy, textiles, leather products, surgical instruments, defense equipment (guns, ammunition, tanks, submarines, fighter jets, UAVs, and missiles). Banking is also an important sector of the economies, especially in the case of UAE and Bahrain. Main economic sectors & main actors Middle Eastern Oil-Exporting Countries The oil exporters comprise 12 countries: the six countries of the Gulf Cooperation Council (GCC—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates) and Algeria, Iran, Iraq, Libya, Sudan, and Yemen. Together, they account for 65 percent of global oil reserves and 45 percent of natural gas reserves. The countries are mainly exporters of oil, gas, and refined products, with oil and gas contributing about 50 percent to GDP and80 percent to revenue. They are diverse and differ substantially in terms of per...
Words: 3601 - Pages: 15
...Bangladesh, however, necessarily endorses any or all of the views expressed in these Papers. The latter reflect views based on professional analysis carried out by the research staff of Bangladesh Bank, and hence the usual caveat as to the veracity of research reports applies. [An electronic version of this paper is available at www.bangladeshbank.org.bd] Non-Bank Financial Institutions in Bangladesh: An Analytical Review Md. Nehal Ahmed∗ and Mainul Islam Chowdhury∗ Abstract Non-Bank Financial Institutions (NBFIs) in Bangladesh are gaining increased popularity in recent times. Though the major business of most NBFIs is leasing some are also diversifying into other lines of business like term lending, housing finance, merchant banking,...
Words: 7848 - Pages: 32
...|page | |01 |Executive Summary |02 | |02 |Background of ONE Bank Limited |03 | |03 |Company Milestones |04 | |04 |Common Ways of Risk Handling |05-06 | |05 | |07-09 | | |Risks associated in Banking Services | | |06 |Bank Risk Management Systems |09-21 | |07 |Insurance Coverage |22-25 | |08 |Bibliography |26 | Executive summary The report has been prepared as a mandatory requirement of our course F-636 (Risk Management and Insurance). It is the summarized outcome of what we have learned till now in the sectors of managerial risk and insurance coverage...
Words: 3390 - Pages: 14
...by monetary authorities in order to restore financial stability in Ireland. This includes looking at policies such as the recapitalisation of banks and blanket guarantee in order to stabilize the banking system. Following this an insight into Ireland’s people and the banking systems combined. This deals with restructuring loans given to households and companies. A huge emphasis was placed on mortgages given to households during the boom times. Prevailing monetary conditions and policy context for the Irish Economic Crisis When Ireland was announced “in recession” back in 2008 numerous monetary conditions and policies were to blame. Ireland had issues with its banking systems. Its banks needed urgent and constant capital injection to the point the government alone could no longer support them. This soon highlighted that there were clearly further solvency issues underlying. The cause of the recession was blamed on the ever expanding property market to its bust point. This played a significant factor but was not the main reason for the recession as was soon discovered. This was linked to the construction industry which had seen some outstanding performance during boom times. On the collapse of the property bubble the construction industry suffered leading to high unemployment and declining growth rates. Mortgage and lending was an issue that sparked recession. This involved banks giving loans over and...
Words: 2160 - Pages: 9
...much-feared revolution of either Communist or fascist persuasion, thankfully never materialized, Americans flirted with a number of radical alternatives to the status quo. Some of those radical alternatives faded into memory, while others were incorporated into the New Deal, where a few remain with us even today. The Great Depression plunged the American people into an economic crisis unlike any endured in this country before or since. The worst and longest downturn in our economic history threw millions of hardworking individuals into poverty, and for more than a decade neither the free market nor the federal government was able to restore prosperity. The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in 1930 and lasted until the late 1930s or middle 1940s. It was the longest, most widespread, and deepest depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the world's economy can decline. The depression originated in the U.S., after the fall in stock prices that began around September 4, 1929, and became worldwide news with the stock market crash of October 29, 1929, which is known as Black Tuesday. The Great Depression had devastating effects in countries rich and poor. Personal income, tax revenue, profits and prices dropped, while international trade plunged by more than...
Words: 3648 - Pages: 15
...Corporate Bond Market in the Transition Economy of Vietnam, 1990-2010 VUONG, Quan-Hoang and TRAN, Tri Dung Corporate bond appeared early in 1992-1994 in Vietnamese capital markets. However, it is still not popular to both business sector and academic circle. This paper explores different dimensions of Vietnamese corporate bond market using a unique, and perhaps, most complete dataset. State not only intervenes in the bond markets with its powerful budget and policies but also competes directly with enterprises. The dominance of SOEs and large corporations also prevents SMEs from this debt financing vehicle. Whenever a convertible term is available, bondholders are more willing to accept lower fixed income payoff. But they would not likely stick to it. On one hand, prospective bondholders could value the holdings of equity when realized favorably ex ante. On the other hand, the applicable coupon rate for such bond could turn out negative inflationadjusted payoff when tight monetary policy is exercised and the corresponding equity holding turns out valueless, ex post. Given the weak primary market and virtually nonexistent secondary market, the corporate bond market in Vietnam reflects our perception of the relationshipbased and rent-seeking behavior in the financial markets. For the corporate bonds to really work, they critically need a higher level of liquidity to become truly tradable financial assets. JEL Classifications: G32, G38, O16 Keywords: Vietnam; Corporate Bond; Interest...
Words: 17957 - Pages: 72
...Journal of Banking & Finance 35 (2011) 2217–2230 Journal of Banking & Finance journal homepage: www.elsevier.com/locate/jbf Liquidity and asset pricing: Evidence from the Hong Kong stock market Keith S.K. Lam ⇑, Lewis H.K. Tam Department of Finance and Business Economics, Faculty of Business Administration, University of Macau, Av. Padre Tomas Pereira, S.J. Taipa, Macao, China a r t i c l e i n f o a b s t r a c t This study investigates the role of liquidity in pricing stock returns in the Hong Kong stock market. Our results show that liquidity is an important factor for pricing returns in Hong Kong after taking well-documented asset pricing factors into consideration. The results are robust to adding portfolio residuals and higher moment factor in the factor models. The results are also robust to seasonality, and conditional-market tests. We also compare alternative factor models and find that the liquidity four-factor model (market excess return, size, book-to-market ratio, and liquidity) is the best model to explain stock returns in the Hong Kong stock market, while the momentum factor is not found to be priced. Ó 2011 Elsevier B.V. All rights reserved. Article history: Received 10 June 2010 Accepted 17 January 2011 Available online 22 January 2011 JEL classification: G12 G15 Keywords: Liquidity Asset pricing Hong Kong stock market Factor model Fama French three factors Higher moment Momentum 1. Introduction Investors face liquidity risk when they transfer...
Words: 6217 - Pages: 25
...world and consumer prices continue to drop, there is renewed fear of deflation. The nightmare scenario is Japan's 'lost decade'. Michael Lim Mah Hui explains what happened in Japan and considers the prospect of a similar fate. IN the last 37 years (1970-2007), there have been 124 banking crises, an average of 3.4 every year (Laeven and Valencia, 2008). Some have been minor, others very serious and long-lasting, like the one in Japan from 1991 to 2002. The most recent is the financial crisis that started in the US in July 2007 and is playing out in front of us today. It is also the most serious, systemic, and global since the Great Depression of 1932. A banking or financial crisis can be defined as a dislocation of the banking system where a significant number of banks and other financial institutions become illiquid and insolvent due to massive defaults on bank loans and other assets. An escalation of non-performing assets of banks will result in heavy losses depleting banks' capital. Banks become insolvent when their debt obligations (liabilities) exceed the value of their assets, i.e., the sale proceeds from their assets are inadequate to pay for their debts. Conditions preceding a banking crisis - financial deregulation Unbridled deregulation of the financial industry is at the heart of financial instability and crises. What began as a trickle became a wave and today it has broken loose as a financial tsunami engulfing the whole world. Prior to the 1970s, commercial...
Words: 2839 - Pages: 12
...INTRODUCTION In economics, unemployment refers to the condition and extent of joblessness within an economy, and is measured in terms of the unemployment rate, which is the number of unemployed workers divided by the total civilian labor force. Hence, unemployment is the condition of not having a job, often referred to as being "out of work", or unemployed. The problem of unemployment has had a great impact on Nepalese society and the economy. METHODOLOGY The methodology that I have used to collect information has been secondary data research. All the required data, facts and figures have been looks upon on Nepal survey report 2010 and from the internet. EXPLANATION The exact unemployment rate in Nepal has always been debatable. Some agencies report it to be around 20 percent while others report it to be around 40 percent. So, the unemployment rate of Nepal depends on who you ask. What is not debatable is the fact that solutions that have been tried have always been a blanketed approach to reduce unemployment throughout the nation. What our policymakers have to realize is the fact that blanketed approaches don’t usually work. There are three kinds of unemployment: structural, frictional, and cyclical. Frictional unemployment occurs when people move from one place to another or when they quit one job to find another. Cyclical unemployment occurs when people lose their jobs due to business-cycle fluctuations. It increases when an economy...
Words: 1239 - Pages: 5
...2.0 Introduction The banking industry has undergone tremendous changes after the Asian Financial Crisis in year 1997. CIMB bank, as a major player in this industry, has faced a lot of challenges from local and international. As a growing bank in that time, CIMB bank has struggled hardly to become the best financial institution in Malaysia. In recent years, the government has liberalized the banking industry, which allows more foreign financial institutions to start their business here. This has increased the level of competition within the industry and in fact, has affected the position of CIMB bank as one of the leading banks in local market. Owing to certain problems mentioned above, we have chosen CIMB bank as the topic to perform in-depth research and analysis on the organization. Our main objective is to advise the Board of Directors of CIMB bank on the impact and implications of current developments and challenges on its organization and make appropriate recommendations to ensure the continued relevance, competitiveness and growth of the organization. CIMB bank has many retail branches across the ASEAN and operates under several corporate entities such as CIMB Investment Bank, CIMB Islamic, CIMB Securities International and etc. Besides, CIMB bank business model basically covers several areas which are Consumer Banking, Insurance & Takaful, Corporate & Institutional Banking and CIMB Thai. (CIMB, 2012) The vision of the CIMB bank is to be the Premier Investment...
Words: 8965 - Pages: 36
...BM COLLEGE OF MANAGEMENT AND RESEARCH INDORE SYNOPSIS REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF MASTER OF BUSINESS ADMINISTRATION AWARDED BY DEVI AHILYA VISHVAVIDYALAYA, INDORE ON “A Comparative Study of Customer Satisfaction From Home Loan Schemes Launched By Government and Private Sector Banks In Indore” (With Special Reference to PNB and ICICI ) [pic] MBA 3rd SEM 2011-2013 PROJECT GUIDE SUBMITTED BY Dr. SHAILASH TRIPATHI VIVEK TRIVEDI FACULTY, (BMCMR) “A Comparative Study of Customer Satisfaction From Home Loan Schemes Launched By Government and Private Sector Banks In Indore” (With Special Reference to PNB and ICICI ) PREFACE The synopsis report on “A Comparative Study of Customer Satisfaction From Home Loan Schemes Launched By Government and Private Sector Banks In Indore” (With Special Reference to PNB and ICICI ) ” is an attempt to know the satisfaction level of customers from the various home loan schemes launched by a government and private sector bank to be selected by the researcher. This research is divided into eight chapters. Their brief account is as under : Chapter 1 deals with the Introduction of the topic which will include the conceptual framework related to the Home loan and its different...
Words: 5197 - Pages: 21
...CHAPTER ONE INTRODUCTION 1.1. Background: Financial stability and economic growth is the concern of any country that looks for the welfare of its people. Therefore, the banking sector and its role of intermediation between savers and borrowers is the target of regulators in every country to enhance stability, soundness and economic growth. The banking sector is one component of the financial system and its importance stems from the importance of the financial system as a whole. 1.2. 1.2 Financial Systems The financial system is defined by Gurusamy (2008) as a system that aims at establishing and providing a regular, smooth, efficient and cost effective linkage between depositors and investors (ISBN 0-07-015335-3). Researchers such as Levine...
Words: 1539 - Pages: 7
...The Application of FRICTO Analysis to Making Financing Decisions in Practice: Two Case Examples in Australia George W. Kester, Washington and Lee University Jamie Mckellar, Thiess Pty Ltd Jeremiah Mulcahy, BHP Billiton Ltd This paper describes the use of the FRICTO analytical framework for comparing financing alternatives and making financing decisions. Two case examples in Australia are presented to illustrate how two former investment bankers have used the FRICTO framework to help clients make financing decisions that take into account flexibility, risk, income, control, timing and other considerations. They have found the analytical framework prompts decision-makers to consider other important issues beyond risk and the effect on earnings per share that reflect a company’s unique and often complicated circumstances. INTRODUCTION Modigliani and Miller (1958) advanced the proposition that based upon several simplifying assumptions, capital structure has no effect on the value of a firm. However, recognizing the impact of taxes, bankruptcy, agency costs, and asymmetric information, capital structure theory has evolved to acknowledge that the use of debt does affect the value of a firm. Modern theories of capital structure can be classified into two categories: “static tradeoff models” and the “pecking order hypothesis.” Static tradeoff models imply an optimal debtequity mix which is determined by a tradeoff between the benefits and costs of debt (i.e., balancing the tax...
Words: 5229 - Pages: 21
