...CRISIS IN GREECE: STUDY OF THE FACTORS THAT LED TO THE CRISIS. A Research Paper: Under The Guidance of:Dr Somesh Kumar Mathur Indian Institute of Technology Kanpur Pankaj Kumar Y8333 Sanchit Singhal Y8442 Sulabh Boudh Y8513 INTRODUCTION Greece is currently facing a very severe crisis, with expectations of a sovereign default as Greece confronts with the second highest budget deficit, as well as the second highest debt to GDP ratio in the EU. The paper uses insights from the literature to offer an analytical treatment of the crisis in Greece. The crisis itself is very likely to be a result of: The gradual worsening of Greek macroeconomic Fundamentals over 2000-2009 to levels discrepant with other EU members. A shift in market expectations, from a scenario of credible commitment to future EU participation to a scenario of non-credible EU commitment without fiscal guarantees, respectively occurring in November 2009 and February/March 2010. The pricing by markets of a (previously nonexistent) default risk that follows the withdrawal of an implicit guarantee on Greek debt by other EMU countries (mainly Germany). Interestingly, our account of the 3 factors sparking and escalating the crisis also helps explain why prices on Greek government bonds have not recovered but continued to plummet following the announcement of the EU/IMF rescue plan. Our analysis suggests that the involvement of an external institution like the...
Words: 890 - Pages: 4
...Default of 1998 Abbigail J. Chiodo and Michael T. Owyang currency crisis can be defined as a speculative attack on a country’s currency that can result in a forced devaluation and possible debt default. One example of a currency crisis occurred in Russia in 1998 and led to the devaluation of the ruble and the default on public and private debt.1 Currency crises such as Russia’s are often thought to emerge from a variety of economic conditions, such as large deficits and low foreign reserves. They sometimes appear to be triggered by similar crises nearby, although the spillover from these contagious crises does not infect all neighboring economies—only those vulnerable to a crisis themselves. In this paper, we examine the conditions under which an economy can become vulnerable to a currency crisis. We review three models of currency crises, paying particular attention to the events leading up to a speculative attack, including expectations of possible fiscal and monetary responses to impending crises. Specifically, we discuss the symptoms exhibited by Russia prior to the devaluation of the ruble. In addition, we review the measures that were undertaken to avoid the crisis and explain why those steps may have, in fact, hastened the devaluation. The following section reviews the three generations of currency crisis models and summarizes the conditions under which a country becomes vulnerable to speculative attack. The third section examines the events preceding the Russian default...
Words: 6882 - Pages: 28
...This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: G7 Current Account Imbalances: Sustainability and Adjustment Volume Author/Editor: Richard H. Clarida, editor Volume Publisher: University of Chicago Press Volume ISBN: 0-226-10726-4 Volume URL: http://www.nber.org/books/clar06-2 Conference Date: June 1-2, 2005 Publication Date: May 2007 Title: The Dot-Com Bubble, the Bush Deficits, and the U.S. Current Account Author: Aart Kraay, Jaume Ventura URL: http://www.nber.org/chapters/c0124 11 The Dot-Com Bubble, the Bush Deficits, and the U.S. Current Account Aart Kraay and Jaume Ventura 11.1 Introduction Since the early 1990s, the United States has experienced steadily widening current account deficits, reaching 5.7 percent of gross national product (GNP) in 2004 (see top panel of figure 11.1). These deficits are large relative to the postwar U.S. historical experience. With the exception of a brief period in the mid-1980s where current account deficits reached 3.3 percent of GNP, the U.S. current account has typically registered small surpluses or deficits averaging around 1 percent of GNP. As a consequence of the recent deficits, the U.S. net foreign asset position has declined sharply from –5 percent of GNP in 1995 to about –26 percent by the end of 2004 (see bottom panel of figure 11.5). The goal of this paper is to provide an account of this decline that relates it to other major macroeconomic events and helps us to...
Words: 17727 - Pages: 71
...Essays, Term Papers & Book Notes • Essays • Resource Center I'm Researching... • danielynn31 d… • • • ◦ Back danielynn31 Saved Recents Uploads My Answers ◦ Back ◦ Ask a Question ◦ My Questions ◦ My Answers ◦ Preferences • Account ◦ Back ◦ Account Settings ◦ Profile ◦ Sign Out • • • • • I'm Researching... Products • • • • • Home Research Drive Answers Texty • • • • • Company Legal Site Map Contact Advertise About • • • ©2016 StudyMode.com 1. Home > 2. Debt > 3. Student Loan Crisis... < Back to Debt Student Loan Crisis Research Paper Debt, Education finance, Higher education • • • • By sympathys Jun 11, 2013 1348 Words 220 Views PAGE 1 OF 5 �PAGE � How to Make College More Affordable Many of the protesters occupying Wall Street and other places say they are upset about the rising price of going to college. There is little dispute today that the number of students who have debt has increased, and that the amount of money they have borrowed has gone up (Billitteri). Many students incur large amounts of debt that will never pay dividends in higher wages or greater job satisfaction, and they graduate into a world with weak employment prospects. It's a betrayal of the American social contract that says if you work hard and invest in yourself through education, you'll be able to build a better life. The current system is badly in need of an overhaul, and this paper will present...
Words: 1243 - Pages: 5
...Turning point in Asian economy was 2 July 1997, the day when Thai Baht fell around 20 % against the $US. “It all began in Thailand’ summarizes the conventional explanation of the early stages of the crisis.” (Hill, p.3) How it all began, what factors caused the crisis, what segments were affected the most, what was the backup plan, and what policies should have been taken to prevent the crisis are the points that this paper will cover. First and Second-Generation Models According to 1996 annual report of Bank for International Settlements (BIS), pre-crisis fundamentals exhibit economic performance of Asian countries. They’ve experienced moderate inflation rates of about 6%, high savings rate of 32%, and trade openness indicators of 39%. Table 1: East Asian Economic Conditions Before Crisis Although accounting and macroeconomic analytics have failed to foreseen the currency crisis, which is inevitable, first and second-generation models explain us was it due to weakening macroeconomic fundamentals or financial contagion. In accordance to first-generation model developed by Krugman 1979, market-speculative movements, in response to policies, are incompatible with fixed exchange rate regime. What it means is that “speculators who want to make a profit can buy foreign exchange reserves causing its exhaustions and forcing the country to devalue or abandon the exchange rate peg.” As many studies have argued, the Asian crisis represents the consequence of its own acts in corporate...
Words: 4114 - Pages: 17
...Capstone Project Citsse: ACC599 Date: 06/15/2013 Abstract In this paper, we are going to discuss the following items related to our 5th assignment: Capstone Project. As a corporate accountant, I felt more comfortable selecting the company I work for. I was actively involved in the preparation of the 10-k. I have selected for the case study the MNC Globalstar, Inc. a leading provider of Mobile Satellite Services. 1. Write a twelve to fifteen (12-15) page paper in which you create an executive summary of the company that discusses the company, industry, products and services, and competitive advantages in the marketplace. 2. Evaluate the financial condition of the company and its ability to achieve the strategic objectives as discussed in the annual report. 3. Analyze the company’s profitability trends and recommend strategies for management to improve or capitalize on these trends. 4. Evaluate the company’s cash position. Articulate its ability to invest in capital projects in future years. 5. Analyze the effectiveness of the company’s inventory or service costing methods. Make a recommendation for improvement in this area. 6. Evaluate the adequacy or risks of the internal control environment noted in the annual report by management, and internal and external auditors. 7. Assess the risk to the company related to foreign currency translations, foreign economic events, and international financial reporting standard requirements in order to summarize...
Words: 3772 - Pages: 16
...the prudent regulatory measure of the central bank including guidance regarding prudential norms of capital adequacy, classification of loans, on-site and off- site super vision have made the PCBs sound in Banking operation. For these reasons, they are found profitable in their business. Their exposure in respect of the cost of debt helps them to ensure higher profitability and their potentiality in the banking industry. An effectively functioning financial system requires a banking system that can earn a reasonable return by taking an acceptable level of risks. 2.0 Statement of the problem In order to survive in the long run, it is important for a bank to find out what are the factors influencing cost of debt so that it can take initiatives to increase its profitability and performance. Bank performance is also vitally important for all stakeholders, such as the owners, the investors, the debtors, the creditors, the depositors, the managers of banks, the regulators and the government. In this study the research question is “What are the factors that influence cost of debt of private commercial banks in Bangladesh Capital is an important and critical resource for all companies. The capital resources can be divided into two...
Words: 8278 - Pages: 34
...Introduction: 1.1 Origin of the project paper: We do the project paper for our course named "BUSINESS FINANACE" course code 201.Business finance course helps us to develop a framework for decision making in the context of managerial finance and to provide a solid grounding in the principles and practice of financial management. All of the important and basic areas of finance is covered in this course. This course helps us to develop the skills to understand how managers access, understand, analyze, and utilize financial information for decision making. In this course financial ratio analysis is a very important term what helps us to find out the real condition of any company's. Here we are going to find out the financial ratios of GENERATION NEXT FASHIONS LTD from . We will use the time series to compare of GENERATION NEXT FASHIONS LTD's ratios. 1.2 Objectives of the project paper: The traditional financial statements that comprise of the balance sheet and profit and loss account do not give enough information related to financial operations of the company. These financial statements prepared as per the statutory requirement of law need to be analyzed in order to evaluate the past performance of the company and the future prospects. Our perspective to do this project paper are giving below: * To gather practical knowledge about ratio analysis. * How do the time series work to do the internal comparison? * What types of solution GENERATION NEXT FASHIONS LTD can take to...
Words: 3597 - Pages: 15
...International Finance Assignment 1 Nine Dragon Paper NDP case study By: Ehab M. Helmy Marina Emad Supervised By: Dr. Abir Zein How Mrs. Cheung does think? What does she believes in when it comes to building her business? She always thinks ahead and has a strong long-term vision of where her company should be. She has strong industry knowledge and so much enthusiasm for her work. This is the quality that good management must have. She wants to make NDP a 100 years old business, not only a lifelong career for her but a business lasts for generations. (The answer was taken from a research on Mrs. Cheung business history) How would you summarize the company’s financial status? How does it reflect the business development goals and strategies employed by Mrs. Cheung? While trying to analyze a company’s financial status, we have to take a look on three main statements: Balance sheet statement – Cash flow statement – Income statement | | 2011 | 2012 | 2013 | Rate of Change | | Liquidity Ratio | Current Ratio | 1.312961 | 1.014966 | 1.277426 | -3% | Ability of the firm to pay its short term obligations | | Quick Ratio | 0.993251 | 0.71159 | 1.0084 | 2% | | | Returns | | -0.22696 | 0.258589 | | | | | | | | | | Assets Management Ratios | Inv. Turn Over | 9.53362 | 6.475214 | 7.604922 | -20% | Utilization of the firm's Assets | | Days of sales outstanding DSO | 75.68459 | 68.40927 | 94.96364 | 25% | | | Fixed Assets TO |...
Words: 402 - Pages: 2
...Policy Research Institute, Ministry of Finance, Japan, Public Policy Review, Vol.8, No.1, June 2012 45 Public Sector Accounting - An Interdisciplinary Field Involving Accounting, Economics, and Jurisprudence 1 Ryosuke Tao Research Fellow, Institute of Administrative Management Abstract Public sector accounting has recently been improved. Currently, there are requirements to disclose stock information in addition to the flow information presented in budget statements or accounts statements. Public sectors have prepared and disclosed their financial statements (including balance sheets and income statements) based on business accounting approaches. Moreover, as a matter of policy, the government tends to prepare and disclose cost information along with the financial statements for the individual ministries and governmental agencies. The objectives of clarifying the fiscal conditions in a state through the preparation and disclosure of financial statements are to fulfill the state’s accountability to its citizenry and market participants and to optimize and enhance the efficiency of its fiscal activities. Most importantly, the improved information should contribute to democratic decisions on public finance. A perspective different from the business accounting is that public sector accounting places more emphasis on inter-generational fairness. With respect to the inter-generational benefits and burdens, however, various factors must be considered, and the differences between...
Words: 10883 - Pages: 44
...Abstract This research assesses the fundamental causes of the current financial crisis that hit the USA in 2008. A Close look at financial analysis specifies that theoretical modeling based on unrealistic anticipations led to serious problems in mispricing in the enormous unregulated market for credit default swaps that exploded upon catalytic rises in residential mortgage defaults. Latest academic research suggests solutions to the economic crisis that are appraised to be far less costly than bailing out investors who made poor decisions with respect to credit analysis. Introduction The financial crisis that occurred in 2008 is of such epic proportions that even astronomical amounts spent to address this issue have by far been not able to resolve it. This economic crisis is the worst to ever hit USA since the great depression and is utmost important to economists since this led to 2.6 million unemployed furthermore 3.4 trillion dollar were lost in real estate wealth and the stock market also lost 7.4 trillion according to the Federal Reserve. Besides the $700 billion bill approved by Congress, the Federal Reserve has bailed out institutions and markets by generating about $1.3 trillion in investments in various risky assets, also including loans to otherwise bankrupt organizations & collateralized debt obligations which were completely backed by subprime mortgages that were defaulting at rapid rates. Furthermore a $900 billion is in the process of being proposed...
Words: 2121 - Pages: 9
...a corporation finances its assets through some combination of equity, debt, or hybrid securities. A firm's capital structure is then the composition or 'structure' of its liabilities. For example, a firm that sells $20 billion in equity and $80 billion in debt is said to be 20% equity-financed and 80% debt-financed. The firm's ratio of debt to total financing, 80% in this example, is referred to as the firm's leverage. In reality, capital structure may be highly complex and include dozens of sources. Gearing Ratio is the proportion of the capital employed of the firm which come from outside of the business finance, e.g. by taking a short term loan etc. (http://en.wikipedia.org/wiki/Capital_structure). Introduction Packaging is the expertise of protecting a product for distributing, storage, sale, and use. Research shows that packaging can be traced back to the ancient times. In this research paper we will be looking at the company Sonoco Products history, capital adequacy, its cash flow, its financing history and future plans. This company has a personal attachment to my family. It supported 3 generations of my family financially. My great grandfather (Tommy Mack) started working with the company in the 1940’s. Grandfather (Lee E. Mack) started in 1949, and retired after 43 years in 1992. My father (Lee E. Mack Jr.) started in 1973 and retired after 40 years in 2013. Before my research on Sonoco the only thing I knew about the company was that it engineer...
Words: 1746 - Pages: 7
...B.A./M.A. summa cum laude, Honors in Economics, May 1975. PROFESSIONAL POSITIONS Professor of Economics, Harvard University, September 1999 – present; Thomas D. Cabot Professor of Public Policy, January 2004 – present. Chief Economist and Director of Research, International Monetary Fund, 2001–2003. Director, Harvard Center for International Development, 2003–2004. Professor of Economics and International Affairs, Princeton University, 1992–94; Charles and Marie Robertson Professor of International Affairs, 1995–1999. Professor of Economics, University of California at Berkeley, 1989–1991. Associate Professor of Economics, University of Wisconsin-Madison, 1985–1988. Economist, International Finance Division, Board of Governors of the Federal Reserve System, 1980–1983; Section Chief, Trade and Financial Studies Section, 1984. Economist, Research Department, International Monetary Fund, Oct. 1982 – Sept. 1983. VISITING POSITIONS BP-LSE Visiting Centennial Professor, London School of Economics, 1998–99 academic year. Morgenstern Visiting Professor of Economics, New York University, spring semester 1995. Visiting Scholar, Bank of Japan, Institute for Monetary and Economic Studies, summer 1991. Visiting Scholar, Research Department, World Bank, summer 1989. Visiting Scholar, Board of Governors of the Federal Reserve System, International Finance Division, 1988, 1994....
Words: 3919 - Pages: 16
...ASIAN JOURNAL OF MANAGEMENT RESEARCH Online Open Access publishing platform for Management Research © Copyright 2010 All rights reserved Integrated Publishing association Review Article ISSN 2229 – 3795 Non performing assets: Issues, Causes and remedial Solution Poongavanam.S H.O.D., Department of Management studies, Ranippettai Engineering College, Thenkaddapanthangal, Walaja Taluk, Vellore District. -632513 Tamil Nadu. s.poongavanam@gmailo.com ABSTRACT The banking industry has undergone a sea change after the first phase of economic liberalization in 1991 and hence credit management. While the primary function of banks is to lend funds as loans to various sectors such as agriculture, industry, personal loans, housing loans etc., in recent times the banks have become very cautious in extending loans, this is due to mounting nonperforming assets (NPAs). Therefore, an NPA account not only reduces profitability of banks by provisioning in the profit and loss account, but their carrying cost is also increased which results in excess & avoidable management attention. Apart from this, a high level of NPA also puts strain on a banks net worth because banks are under pressure to maintain a desired level of Capital Adequacy and in the absence of comfortable profit level, banks eventually look towards their internal financial strength to fulfill the norms thereby slowly eroding the net worth. Considering all the above facts banking industry has to give more importance to...
Words: 3314 - Pages: 14
...Abstract This paper would discuss the effect of external debt on economic growth with four areas, the effect on private local investment, foreign direct investment, government expenditure and export growth. Three theoretical models are adopted, namely Debt Overhang Theory, Liquidity Constraint Hypothesis and Crowding-out Effect respectively. Two policy implications on debt relief and debt restructuring are analyzed. And finally, the paper will include the discussion on the necessary tradeoff with inflation and contractionary fiscal budgeting after debt servicing. KEY Words: Heavily In-debt Poor Countries (HIPC), External Debt/Foreign Debt) Sustainability, Debt-GNI Ratio, Debt-Export Ratio, Debt Service Ratio Word count (excluding table of content, tables and reference): 2974 Topic: The Effect of External Public Debt in Developing Countries on Economic Growth - An Empirical Study on Argentina Abstract P.1 1. Introduction P.3 1.1 Literature Review P.4 1.2 Structure and Magnitude of External Debt of Argentina P.4 1.3 Theoretical Relationship between External Debt and Economic Growth P.6 1.4 Research Question(s) and Framework P.7 2. Data Collection and Empirical Analysis P.7 2.1 The effect of external public debt on: ...
Words: 3688 - Pages: 15
