...Descamps 08 Fall 08 Fall Table of Contents 1.0 Introduction 3 2.0 Australia’s Economic Performance 3 2.1 2001-2007 Economic Performance 4 2.2 2008-2012 Performance 4 2.3 Relationship Between Economic Growth and Productivity Growth 5 3.0 Policies Used to Address Lagging Productivity Growth 7 3.1 Infrastructure 7 3.2 Regulation Reform 8 3.3 Policy Effectiveness 9 4.0 Conclusion 10 5.0 Reference List 11 1.0 Introduction Driven by its dependence on natural resources, Australia’s economy has performed well in the aftermath of the 2007-08 Global Financial Crisis. The relative ease at how Australia has fared post crisis has disguised a worrying trend, a lagging productivity growth. Commissioned by the House of Representatives Economics Committee this report will cover Australia’s productivity performance between 2008 and 2014, gaining a greater understanding of the factors behind Australia’s declining productivity performance. This report will cover productivity growth before and after the GFC, critical analysis of policies aimed at addressing lagging productivity and the effect of these policies on the recovery from the GFC. ‘Productivity is a measure of how efficiently an economy is operating…Australia’s future productivity performance will affect its rate of recovery from the current global financial crisis as well as its future prosperity and capacity to address the longer-term challenges of population ageing and climate change”(Productivity Commission...
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...Introduction The concept of global financial crisis (GFC) is not concept that has emerged recently. In fact, GFC dates back to the period of Great Depression in the 1930’s changing the perception that market failures and other economic factors affect the way businesses operate. The global financial crisis (GFC) of 2007-2009 resulted due to risky lending and increased loan defaults especially in the housing sector. A significant number of questions rose about the stability and policies that regulated the market. Among the many attributes of the market, major factors that contributed to the downfall relates to macroeconomic trends, market failures and regulatory failures. While several years have passed since the occurrence of the crisis, the United States of America is still recovering from events that saw the collapse of Bear Stearns, a mortgage under-writer in US 2007, Lehman Brothers (2008) and the near collapse of AIG Insurance. It is believed that the GFC of 2007 was the worst financial crisis of recent times. The US market plunged right into the recessionary periods and large multi-national companies struggled to keep up with the market conditions. Also known as, the burst of the financial bubble, governments realized the lack of regulations to control the market. These regulations related to accounting policies, auditing policies and more stringent rules as responses to major corporate collapses and upheavals in the financial sector. The introduction of Sarbanes-Oxley...
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...The Australian Financial System in the 2000s: Dodging the Bullet Kevin Davis* Abstract The global financial crisis (GFC) occupied only a quarter of the decade of the 2000s but, because of its severity and implications for future financial sector development, dominates the decade. The Australian financial system coped relatively well with the GFC, raising the question of whether there was something special about its structure and prior evolution which explains that experience. This paper reviews Australian financial sector performance and development over the decade, then provides a more detailed overview of the Australian GFC experience and its implications, and considers explanations for the Australian financial sector resilience. 1. Introduction The Australian (and global) financial system entered the first decade of the millennium preparing for a systems crisis, in the form of the Y2K computer scare, which on 1 January 2000 passed without event. But towards the end of the decade, the financial sector was faced with, arguably, its most serious systemic crisis ever, which the Australian financial system and economy weathered relatively well compared with advanced nations in the northern hemisphere.1 While the GFC occupied only one-quarter of the past decade (from mid 2007), it prompts the questions which this review must seek to answer. Was there something about the structure and evolution of the Australian financial system which explained its resilience in the face...
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...Financial Sector Regulation and Oversights 9 Increase in the Number of Bankruptcies 11 Global Financial Crisis and Its Positive Effects 12 Designing Regulations to Monitor the Financial Sector 12 Global Governance as a Side Effect of the Global Financial Crisis 13 Lessons Learned 16 Domestic Lessons Learned 16 Global Lessons Learned 17 Lessons from Romania. 18 The Role of Financial Executives in GFC 19 Conclusions 21 References 24 Abstract The first financial crisis of the twenty-first century has not yet ended, according to Gorton and Metrick (2012), the wave of research on the crisis has already exceeded any single reader’s capacity, with the pace of new work only making this task harder. The Global Financial Crisis is considered by many economists to be the worst financial crisis since the Great Depression. Global Financial Crisis resulted in the threat of the total collapse of large financial institutions, the bailout of banks by national governments, and market downturns around the world. In the aftermath of this crisis, the housing market declined significantly and has not recovered. This essay begins by providing an overview of the Global Financial Crisis. Both the positive and negative effects of Global Financial Crisis will be examined from both a domestic and international perspectives. The lessons learned from GFC also will be summarized. Positive and Negative Effects of the Global Financial Crisis The Global Financial Crisis (GFC) is considered...
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...Globalisation is a phenomenon that poses great opportunities and should be pursued while recognising and addressing the costs. Globalisation takes various forms, yet defined here within the economic scope due to its strong contemporary prominence and impact. Economic globalisation entails the interactions and interdependence of global markets, due to increased mobility of goods, services, capital and communications. Globalisation is driven by many factors, including technological advancements and deliberate neo-liberalist policy. It is not a new phenomenon, yet contemporary globalisation differs dramatically in scale, penetrating more people and remote areas than ever before. Globalisation has many benefits such as economic growth and poverty reduction, yet on a domestic scale economies must be allowed to adapt, and the global economy must be managed on an international scale. Economic interdependence and advances leads to a safer, more democratic world. The forces of globalisation have been set in motion and are not able to be reversed, hence the world must recognise globalisation as inevitable, and work to reap the benefits. Globalisation is an encompassing term, taking various forms that describing the vast social, economic, cultural and political changes that arise due to interaction and integration of people, institutions and governments of different states. Due to contemporary impact, globalisation here is defined within the scope of economic globalisation, it is a process...
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...The Index The Index | 1 | The Introduction | 2 | Financial Subprime Mortgage Crisis Causes | 3 | Introduction & Background to the Situation of the Egyptian Economy prior to the Global Financial crisis | 10 | Financial Subprime Mortgage Crisis Impacts on Egypt | 13 | The Egyptian Economy & the crisis | 21 | The Conclusion & Solutions | 23 | The References | 27 | The Introduction In the second half of 2008, the world economy went through a serious financial upheaval that sparked off in the United States and spread to Europe and the rest of the world. The negative consequences of this financial crisis had bitten the Egyptian economy in many fields. Egypt’s growth rate witnessed setbacks and may have posted its slowest annual growth in half a decade in 2008–2009 as the global crisis hit revenue from tourism, migrant labor remittances, the Suez Canal, export revenues, and investment. The severity of the crisis and its uncertainties demonstrated the need for urgent action to restore financial stability, lead the economic recovery and secure a sustainable future for the country. This paper therefore critically discusses the current global financial crisis and its impact on Egypt. It presents an overview of the Egyptian economy prior to the crisis, followed by an assessment of the depth and impact of the crisis on sectors of the Egyptian economy. Additionally, the paper highlights the actions taken by the Egyptian government to weather the effects...
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...percent; the growth rate of real exports was 14.5 per cent, while inflation was contained at 4.7 per cent. The high level of investment and the rapid growth had been supported by large inflows of foreign capital: in the period 1987–96, annual capital inflows were on average equal to 8.7 per cent of GDP. But there are some financial shocks in the economy. They are Asian financial crisis:1997-1998, Global financial crisis and flood of 2011and political instability of Thailand. These crises were recovered successfully. On 11 August 1997, the IMF unveiled a rescue package for Thailand with more than $17 billion, subject to conditions such as passing laws relating to bankruptcy (reorganizing and restructuring) procedures and establishing strong regulation frameworks for banks and other financial institutions. The IMF approved on 20 August 1997, another bailout package of $3.9 billion. At first the exchange rate policy was strict. But after the Asian crisis policy was changed to managed float which is flexible. At the time of global financial crisis the government adopted some policies to recover this crisis. The Thai government has imposed three types of policy to rebuild confidence, gain economic recovery, and stimulate new economic growth. First, two phases...
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...2014 TOPIC PAPERS NO. 1 TITLE Inflation PAGE 3 2 External Stability 5 3 Unemployment 7 4 Labour Markets 9 5 Financial Markets 11 6 Economic Growth 13 7 Ecologically Sustainable Development 15 8 Globalisation 17 9 Income Distribution 19 10 Developing Economies 21 Produced by “Plain English Economics Pty Ltd” PO Box 522 Jannali NSW 2226 Email: plain.english@bigpond.com Disclaimer: While every attempt is made to ensure the accuracy of information contained in this publication, no liability is held by the producers as a result of any use of the contents of this document. Topic one: Inflation Inflation (%pa) 5% Inflation remains within target 4% There has been some volatility in the actual official or “headline rate” of inflation over the past 3 years. There was a spike in inflation in mid 2011, when the CPI hit 3.5%.This primarily reflected higher food prices as floods around the country and the North Queensland cyclone in early 2011 caused supply shortages of several fruits and vegetables. Over the course of 2012 there was a reversal of this effect, as food supply levels normalised and prices fell as a result. The CPI hit a low of 1.2% in mid 2012. Since then, the headline CPI growth rate has generally been on an upward trend. At 2.9%, the March 2014 CPI is at the upper end of the Reserve Bank target range. Growth Rate % Consumer Price Index March ...
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...1.) In the featured article “The Precautionary Principle as a Basis for Decision Making”, the author, Cass R. Sunstein provides his view on the practicality of the Precautionary Principle and the impact it could have on major policies across the world. The basic underlying principle of the Precautionary principle is that “it is better to be safe than sorry”. The principle can be adopted in many scenarios and it different aspects. An example of the strong application of the precautionary principle was at the Wingspread Declaration at 1998, which advocates the use of precautionary measures even before the cause and effect relationship is examined. The European Union has openly endorsed the principle as a basis for decision making but is yet not clear on how it would be applied to specific scenarios. The Author suggests an examination of the principle’s strengths and weakness as it has potential application in critical areas such as climate change, nuclear power and even war. Even the basic interpretation of the principle raises difficult queries. Without assigning costs to safety, one cannot quantify on how much safety is required while applying the principle. Another issue with the strong application of the principle is that it completely tries to eliminate risk without realizing that eliminating or reducing risks at one end will definitely impact and increase the risk at the other end. There exists risk in every scenario as we live in a world which is scarce in resources making...
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...Company Report: Strategy Evaluation 8 February 2013 Table of Contents Executive Summary 3 Industry: Banking and Financial Services in Australia 4 Overview 4 PESTLE 5 Porter’s Five Forces of Competition 6 Firm: Westpac 7 Overview 7 McKinsey’s 7 S Framework 7 Competition Analysis 11 Blue Ocean Analysis 13 SMSF and Strategy Recommendations 13 What is a SMSF? 13 Three tiers of Non-Customers 13 Strategic Canvas – SMSF 14 3 Keys to Success: Tagline, Focus and Differentiation 14 Option 1 14 VRIO 15 Option 2 15 VRIO 15 Appendix 17 Industry Analysis Charts 17 Porters 5 Forces Analysis Detail 20 Westpac Strategic Priorities 22 Material issues 23 Executive Summary Westpac Bank is Australia’s first Bank, founded in 1817 and is currently one of the “big four” group of lending banks in Australia. Listed on the stock exchange in 1970, Westpac has a history of acquisitions, notably the recent (2008) purchase of St George, which contributes 19% of Westpac’s Cash Earnings. Westpac has a market capitalisation of $76.5 billion in an industry with an overall value of $208.6 billion, or roughly 10% of Australia’s GDP. The financial services industry in Australia is an Oligopoly, with the big four banks accounting for over 80% of the market. A mature market, players are converging, and the industry is forecast to grow at around 8% year on year to 2018. Competition in this industry is fierce, though there is also speculation that there may be significant price signaling...
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...P. Kapur Adviser, RITES and A. K. M. Sharma General Manager, Marketing & Client Services, RITES. Prologue RITES Journal 22.1 July 2009 Indian Infrastructure : Role of RITES Introduction Much of the industrialized world is currently in the grip of recession due to the ongoing global financial crises (GFC) – allegedly triggered by the subprime mortgage crisis of USA in 2007. According to some analysts the recession is the worst since the great depression of 1930s. The world output and trade is forecast to shrink in 2009 – the first such contraction since the end of World War II. The recession is inflicting job losses and wealth loss on an unprecedented scale. In an era of globalization, the GFC has impacted the economies of practically all countries in varying degrees and India is no exception. After a long spell of growth, the Indian economy is experiencing a downturn. Industrial growth is faltering, the current account deficit is widening, foreign exchange reserves are depleting and the Rupee is depreciating. There is gloom in the job market and stock markets have registered a sharp downward spiral. RITES - the Infrastructure People. The Company has come a long way from its inception in 1974 and, apart from India, has operated in 62 countries. The Authors, who have a wide experience in international consultancy, have forcefully brought out the present spread of its consultancy areas and as also its road map for the future. RITES’ contribution in the ...
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...ASX Information Paper Broker Trades Message Specification 29 January 2010 Table of Contents EXECUTIVE SUMMARY .................................................................................3 INTRODUCTION .............................................................................................4 THE GLOBAL FINANCIAL CRISIS ................................................................5 Credit and Debt Markets....................................................................................................5 Equity Markets ...................................................................................................................6 THE GFC AND EQUITY CAPITAL RAISING..................................................6 THE NATURE OF THE AUSTRALIAN EQUITY MARKET...........................10 THE STRUCTURE OF CAPITAL RAISING IN AUSTRALIA ........................12 Initial Equity Capital Raising...........................................................................................12 Secondary Equity Capital Raising..................................................................................15 Placements ................................................................................................................................. 21 Rights Issues .............................................................................................................................. 24 Share Purchase Plans ............................................
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... The Global Economic Crisis: Long-Term Unemployment in the OECD P.N. (Raja) Junankar University of New South Wales, University of Western Sydney and IZA Discussion Paper No. 6057 October 2011 IZA P.O. Box 7240 53072 Bonn Germany Phone: +49-228-3894-0 Fax: +49-228-3894-180 E-mail: iza@iza.org Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. IZA Discussion Paper No. 6057 October 2011 ABSTRACT...
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...-1- Anatomy of a Credit Crisis 2009-07-24 This timeline has grown and been amended since it first appeared in the December, 2008, issue of The Australian Journal of Management, as the editorial, under the title of “The Dominoes Fall: a timeline of the squeeze and crunch”. I include below the December preamble. The version of mid-May, 2009, will appear as the editorial of the June 2009 issue of the AJM, under the title “Anatomy of a Credit Crisis.” I include below the June preamble, in which I assay a framework for understanding the genesis of the crisis. December, 2008: IN ITS LEADER of October 13, 2008, the Financial Times characterized the western world’s banking system as suffering “the equivalent of a cardiac arrest.” The collapse of confidence in the system means that “it is now virtually impossible for any institution to finance itself in the markets longer than overnight.” This occurred less than a month after Lehman Brothers (LB) collapsed, without bailout. Six months earlier Bear Stearns (BS) had been bailed out after JP Morgan Chase (JPM Chase) had bought it for $10 a share, at the regulator’s urging. After LB fell, who would be next? And if LB, who was not at risk? Despite the earlier U.S. government bailouts of the erstwhile government mortgage originators (and still seen as government-sponsored enterprises, or GSEs), the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), and the later bailout of the...
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...Enablers of Exuberance Jennifer S. Taub Sept. 4, 2009 DISCUSSION DRAFT Enablers of Exuberance: Legal Acts and Omissions that Facilitated the Global Financial Crisis Jennifer S. Taub1 I. Introduction This paper explores certain legal acts and omissions that facilitated the over-leveraging and near collapse of the global financial system. These ―Legal Enablers‖ fostered the boom that enriched a class of financial intermediaries who followed a storied tradition of gambling away ―other people‘s money.‖2 These mechanisms also made the pain of the bust disproportionately felt by the middle class and poor while shielding the middlemen who created the problems. These legal Enablers permitted the growth of a shadow banking system, without investment limits, transparency or government oversight. In the shadows grew a variety of highly leveraged private investment pools, undercapitalized conduits of securitized loans and speculation in complex credit derivatives. The rationale for allowing this unregulated, parallel system was that it helped to create innovation and provide liquidity. The conventional wisdom was that any risks associated with a hands-off approach could be managed by the ―invisible hand‖3 of the market. In other words, instead of public police, it relied upon private gatekeepers. A legal framework including legislation, rules and court decisions supported this system. This legal structure depended upon corporate managers, counterparties, ―sophisticated investors‖ and the...
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