...Introduction IT industry and Globalisation 2008 Financial crisis and Impact on Indian IT sector Response steps taken by Indian IT firms (HCL, Infosys and TCS) Conclusion Introduction IT industry belongs to the servicing industry in India since India has not grown completely as Indigenous product developers in IT domain. So the growth and performance of Indian IT industry is completely attributed towards the institutions and organisations to which the software solutions or servicing is exported. It is very tough to comprehend and list out the types of macroeconomic shocks that an IT industry would face. The main reason for this would be IT sector as a whole doesn’t provide its software solutions not just one sector. It provides software solutions to almost all of the sectors like Manufacturing, Retail, Insurance, Banking, and Media, Entertainment so much more and still has scope in so many unexplored domains. Since the onset of globalisation in the early 90s, large capital influx and the crises that could be attributed with it have become one of the known risks. Large flows of capital into another country has created currency crisis in most of the countries. The most predominant of these shocks was recorded was in the East Asian countries. India never fell prey to these shocks and was effectively insulated from these shocks, until it has opened up its markets for investment by foreign players. The globalization and reforms of 90s...
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...Complexities of the U.S. Financial System Strayer University Principles of Finance 100 Professor T. Nhira November 5, 2014 Complexities of the U.S. Financial System Financial markets impact many things in people’s everyday lives, and in most cases they do not realize the effects. Financial markets impact the economy, business, and individuals and ways that are often overlooked. Furthermore, the Federal Reserve also plays an important role to the financial markets and their fluctuations. In addition, interest rates make a huge impact on the entities mentioned above. All of these things tie into the financial markets and the way they affect everyday life. The U.S. financial markets impact the economy, business, and individuals by helping direct the flow of savings and investments throughout the economy in ways that facilitates the increase of capital and the production of goods and services. The worth of credit and returns on investment provide helpful signs to producers and consumers. These helps direct funds from savers and business to the consumers, government, and other type of investors. Also, the existence of healthy financial markets and institutions accelerates the international flow of funds between countries, helping the local economy. This allows investors to compare the cost of financing to their anticipated return on investments, so they can make the correct investment choice that better suits their needs (frbsf.org, 2014). The role of the...
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...The U.S.A, financial system is very difficult. So much so that it impacts at least several influences climate as well as federal regulations and the economy. All these factors have the same problem on the economy, and business people alike. The Federal Reserve Chairman, and Board, also plays a direct role into the running of today’s economic climate. The complications that impact the U.S.A also have a direct influence on the world’s financial economy environment. A lot of these big issues include the exchange rate as well as the interest rate, the highs and lows. The U.S.A financial place has a huge impact on people, businesses, and climate. Thanks to financial places which help colorfully in pack the flow of investments and savings in the economy in ways that can control the increase of management and capital of goods and services. Returns on investments and credit is worth the provide signs to consumers and producers alike. Signs like these help guide money from businesses and savers to the investors and, businesses, governments, and consumers. Funds can advance when financial academy and markets remain successful on a big level between countries. In addition, successful financial academy and markets tend to lower transactions and search costs in the economy. By making a large scale of financial products know to the people, which maintain a constant change with pricing structures and risk as well as capability. A sound financial system offers good useful products that give...
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...strategies that can bring faster development. MFI does therefore play a big role in financing the micro and small enterprises for faster development. MFI’s enterprises are also highly rated for employment creation. They are therefore important in Kenya where unemployment and underemployment are estimated at between 25% and 35% respectively. MFI s’ through the provision of credit influence the type of technology adopted by entrepreneurs and even the rate of technology adoption. Small scale enterprises in the agricultural sector play a big role in providing food, income generation and employment creation. The application of technology is vital in enhancing growth and development of these enterprises. Inflation is vital in the growth and development of any MFI. Both large scale and small scale MFI depend on financial organizations for credit in order to raise capital and also finance any development projects. The large scale organizations have found it much easier to access credit from commercial banks and other financial institutions. The micro and small scale enterprises have not been able to...
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...Financial markets– Exercises Sophie Gay Anger – EM Normandie Financial markets, structure and definitions 1. Financial markets guarantee the quality of information provided to investors. FALSE 2. Primary markets guarantee that all financial instruments are liquid. FALSE 3. Trading on secondary markets are not taken into consideration by the management of quoted companies. FALSE 4. Trades on secondary markets have no impact on the funds collected by quoted companies. TRUE 5. The interbank market is part of the monetary market. TRUE Answer the following questions: 1. What are the key roles played by financial markets? * Market price determination * Information aggregation into prices * Risk sharing between market participants * Liquidity of financial assets thanks to the presence of secondary markets 2. Why do we refer to stocks as “residual claims”? Stocks are considered as residual claims because if a company’s assets are liquidated, stockholders are entitled to a proportional portion of the liquidation boni : what is left after debts to the Government, employees and other debt holders have been paid. This residual value is in general null. 3. What are “preferred stocks”? Since 2004 in France it is possible for a corporation to create “preferred stocks” (or rather preference stocks) offering specific rights to some stockholders. Frequently, these stocks give their holders multiple voting rights...
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...Global Financial Crisis: Likely Impact on Bangladesh [Abstract: The current financial crisis that originated in the United States and quickly spread to Europe and Asia could be a global crisis soon. Reckless lending by banks and financial institutions and slack regulatory system were at the root of the crisis, which is perhaps the gravest since the Great Depression of the 1930s. Amid a severe credit crunch, the rich economies have entered into a deep recession. IMF economists predict the global economic growth to fall from 5.6% in 2007 to 3.9% in 2008, and to 3.0% next year. Billions of dollars pumped by the rich and the emerging economies to bail out the distressed banks or to boost their economies have failed to stop the rot. Bangladesh is apparently immune from the crisis, its economy not being very tightly linked with the rest of the world. It has been enjoying a relatively healthy growth of exports, industrial activity and remittances. Yet, a prolonged recession in the rich countries may cause a slowdown in exports, inflows of remittances, foreign aid and FDI, thereby hurting GDP growth. IMF has said that GDP growth in Bangladesh this year will be lower – 5.5% instead of the officially projected 6.5%, if the global recession lingers. Bangladesh policy makers will need to stay alert to the possibility of the economy being hit by the global slump and adopt appropriate mitigating measures.] Introduction The United States economy is now experiencing a severe credit...
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...Complexities of the U.S. Financial System Briefly describe one (1) way the U.S. financial markets impact the economy, one (1) way the U.S. financial markets impact businesses, and one (1) way the U.S. financial markets impact individuals. Companies sell stock to raise money. Once a stock begins trading in the secondary market, its change in price has no direct effect on the company that issued it. Regardless of the wavering of the stock price, the issuer would still have the money raised to fund their company. Without a doubt, every company wants to see their stock prices rise. Despite mixed opinions, there is a strong positive relationship between financial market development and economic growth. The markets help to efficiently direct the flow of savings and investment in the economy. Credit-rating agencies are known to be influenced by stock prices, and their decisions have a large effect on the availability of credit to the firm. Regulators, who take actions that affect firm cash flows (most prominently, in the case of banks), follow market prices very close. Business owners with good ideas are constrained by the amount of capital they can raise. Although they can use their own money and borrow from their family and friends, these are limited sources of capital. Eventually, as they desire to grow their companies or reach their potential, they have seek to fund-growth using other people’s money. They can borrow from fellow citizens under a contractual obligation to pay...
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...Introduction Currently the United States is in the midst of the worst global financial crisis of the 2l century, which traced its origins to the sub-prime mortgage disaster that began to unravel in 2007. The shocks of global crisis are devastating: homeowners filed for bankruptcies and faced foreclosures in record high numbers, leading Wall Street firms such as Bear Sterns and Merrill Lynch crumbled under their massive exposure to sub-prime mortgage holdings that turned into toxic had assets and over $50 trillion in wealth had been wiped out within the last two years. No financial crisis since the Great Depression prompted many policy reactions as governments scrambled to map out rescue plans to restore stability and revive economic growth. The after effects of the sub-prime mortgage meltdown have left policymakers both in the United States and around the world struggling to restore growth and confidence in their economies. What are the causes behind the U.S. sub-prime mortgage crisis? Is one cause more responsible than another? Why of why not? The principal cause of the economic slowdown was the collapse of the global credit boom and the ensuing financial crisis, which has affected asset values, credit conditions, and consumer and business confidence around the world. The immediate trigger of the crisis was the end of housing booms in the United States and other countries and the associated problems in mortgage markets, notably the collapse of the U.S. sub-prime mortgage...
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...project work 5 2. Introduction 6 3. Urban Poverty 7 4. Urban Microfinance 9 5. Financial Inclusion in India 11 6. Microfinance as an Anti-Poverty Vaccine 15 7. Transformation of Microfinance in India 19 8. Scaling up Microfinance 22 9. Microfinance in India - A Tool For Poverty Reduction 26 10. SWOT Analysis of Microfinance 29 11. Delivery Models of Microfinance 32 12. Interest Rates in MFIs and prevailing trends 36 13. Scope of further study 42 14. Conclusion 44 15. Bibliography 46 OBJECTIVE OF THIS PROJECT WORK This project work tries to outline the prevailing condition of the Microfinance in India in the light of its emergence till now. Microfinance refers to small savings, credit and insurance services extended to socially and economically disadvantaged segments of society. It is emerging as a powerful tool for poverty alleviation in India. The prospect of Micro-Finance is dominated by SHGs (Self Help Groups) - Banks linkage Program. Its main aim is to provide a cost effective mechanism for providing financial services to the poor. To understand the transformation experiences better, the issues that trigger transformation were identified viz.: size, diversity of services, financial sustainability and focus. It is argued that the transformation experiences in India are not large in number. However, I found that...
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...“What were the cause of the financial crisis of 2008 and 2009” 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. Additionally, expert analysis on the 2008 financial crisis asserts that the cause was also due to erroneous monetary policy moves and poor housing policies. The federal government encouraged the expansion of risky mortgages to under-qualified borrowers. Congress pushed for the support of affordable housing through extended procurement of non-prime loans for applicants with low income (Zandi, 2008). The cutting down of interest rates to low levels to supplement for technology bubble of early twentieth century and the effects of Sept 11, a housing bubble was created. This move facilitated individuals with poor credit to obtain mortgages in high percentage when lenders created non-conventional mortgages by offering mortgages with extensive amortization periods, loans with interest and payment alternatives such as ARMs. Ultimately, interest rates rose again and many subprime borrowers stopped paying for their mortgages when their interest rate were reset to higher monthly payments. Subprime mortgage is simply defined as loan offered to someone with a weak credit history. Since the 2008 financial crisis had its source in...
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...1. What caused it? 1. What caused the financial crisis: a. Classic explanation- monetary excesses that lead to booms or busts (housing boom/bust in recent criss ) 2. What caused the monetary excess? a. Evidence that there was monetary excesses before housing boom and bust: Loose fitting monetary policy regarding interest rates- large deviation from the Taylor rule that was shown to have worked in the past, especially during the Great Moderation. b. Reason for deviating from taylor rule: interest rate was low to address the fear of deflation 3. Argument: extra easy policy was responsible for accelerating the housing boom and thereby ultimately leading to the housing bust a. As a result of the unprecedentedly low interest rates, the number of housing starts drastically increased (figure 2). The counter factual line shows what the rate of housing starts would have been if the Taylor line had been followed.. The resulting bust is very easy to see. If this is not evidence enough, the CPI inflation also increased by 60% (3.2% - well above the recommended 2%). 4. Alternative explanations- a. global savings glut (excess of world saving) pushed interest rates down 2002-2004. However, there is no evidence of this b. In actuality there was a savings shortage during this period (figure 3). US was actually running a current account deficit during this period, meaning that saving was less than investment. 5. Monetary policy in other countries a. Global deviations: other...
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...1. The key aspects of Manufactured Homes(MNH) are the selling of manufactured homes at a big price range with the focus on the lower end of the market and the financial participation. MNH sells the mortgages of the customers to unrelated financial institutions and earn money by the difference in the interest rates. MNH sold mobile homes in the Southeast US, primarily to low-income individuals who could not afford a traditional single-family home. The company sells affordable comfort. The company believed that its focus on the lower end of the market had two advantages. First, since its customers were seeking to fulfill an essential housing need, sales were less affected by changes in general economic conditions. Second, the company’s repossession rates were significantly lower than those of the industry since its customers were likely to work very hard to keep their primary residences even when times were bad. Although the market will be very competitive this year, we think the company’s special attention to the low-end of the market, to which many large competitors pay less attention, will give MH a solid niche position. MNH has a viable business, because it earns their money with two different aspects that are related to each other. The selling of manufactured homes to the lower end of the market and the selling of the mortgages (installment contracts) on a recourse basis. When the customers buy a home it is easy for them to buy a mortgage with it at the same company. Another...
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...PROJECT REPORT ON US SUBPRIME CRISIS REFERRING TO IT’S ORIGINS SUBMITTED TO THE UNIVERSITY OF MUMBAI AS A PARTIAL REQUIREMENT FOR COMPLETING THE DEGREE OF M.COM (BANKING AND FINANCE) SEMESTER I SUBJECT: FINANCIAL SERVICES & MANAGEMENT SUBMITTED BY: PILLAI ANUJA SURESH ROLL NO.: 42 UNDER THE GUIDANCE OF Ms.BHAVIKA DAVE SIES COLLEGE OF COMMERCE AND ECONOMICS, PLOT NO. 71/72, SION MATUNGA ESTATE T.V. CHIDAMBARAM MARG, SION (EAST), MUMBAI – 400022. | | CERTIFICATE This is to certify that ___________________________________ __________________________________________________________ of M.Com (Banking and Finance) Semester I (academic year 2013-2014) has successfully completed the project on ______________________________________________________under the Guidance of Ms. __________________________________________. _________________ ___________________ (Project Guide) (Course Co-ordinator) ___________________ ___________________ (External Examiner) (Principal) Place: _____________ Date: ___________ DECLARATION I, __________________________________________________ Student M.Com (Banking and Finance) Semester I (academic year 2013-2014) hereby declare that, I have completed the project on ______________________________________________________________. The information presented in this project is true and original to the best of my knowledge. ___________________ PILLAI ANUJA SURESH Roll No.: 42 | Place: _____________ Date:_____________ ACKNOWLEDGEMENT ...
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...side, particularly in the Indian context. It also discusses the specificity of financial institutions in India and the new information technology initiatives that beneficially affect asset-liability management. The emerging contours of conglomerate financial services and their implications for asset-liability management are also described. Asset-liability management basically refers to the process by which an institution manages its balance sheet in order to allow for alternative interest rate and liquidity scenarios. Banks and other financial institutions provide services which expose them to various kinds of risks like credit risk, interest risk, and liquidity risk. Asset liability management is an approach that provides institutions with protection that makes such risk acceptable. Asset-liability management models enable institutions to measure and monitor risk, and provide suitable strategies for their management. It is therefore appropriate for institutions (banks, finance companies, leasing companies, insurance companies, and others) to focus on asset-liability management when they face financial risks of different types. Asset-liability management includes not only a formalization of this understanding, but also a way to quantify and manage these risks. Further, even in the absence of a formal asset-liability management program, the understanding of these concepts is of value to an institution as it provides a truer picture of the risk/reward...
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...the central bank of the United States. The purpose of the Fed is to control the United States economy by implementing policies to regulate interest rates and the money supply. To understand better how the Fed system works, we have to understand the purpose of money and its function, and explained how the central bank manages the monetary system. Summarize the stated direction of recent monetary policy to realize why the fed makes such decisions as well as list at least one policy that the Fed took to confirm that direction, and as a final point explain the impact of monetary policies on economic production and employment. “Money is the set of assets in the economy that people use to buy goods and services from other people” (Mankiw,). Money includes currency, paper bills, coins, and any of those accepted by sellers in exchange of goods or services. Money has three main functions. The first function is as medium of exchange, buyer use money in exchange for goods or services. Second, money as a unit of account, people use it to post prices and record debts. Finally, money as a store of value, people can use money to transfer purchasing power from the present to the future. Money is administered by the government through the Federal Reserve who acts as the central bank of the nation’s monetary system. The central bank is an institution designed to supervise the banking system, and regulates the quantity of money in the economy. In the United States, the Fed is an example of...
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