Views on The World Financial Crisis: Will It Continue To Deepen?
Introduction
The Great Recession of the 21st Century (Wesel, 2010), which began in 2007, has affected the entire world economy; admittedly, some countries have been hit harder than others but few nations can really say that they have been entirely spared from the crisis. What is more, the devastating repercussions of the financial crisis can still be observed to this day, more than five years since it first began, as numerous countries around the globe are still struggling to get back on track.
The road to recovery from the financial crisis has been more difficult than initially anticipated and, with the dawn of a new year, it is still hard to say whether things will start looking better for the world economy or not. The question on everybody’s mind is whether the world financial crisis will continue to deepen or not.
Background
Though still a somewhat a highly debated matter, the onset of the world financial crisis can be pinpointed to 7 August 2007, when BNP Paribas terminated withdrawals from three hedge funds, on grounds of a complete lack of liquidity (Elliot, 2012). For the two years that followed this incident, the world economy was on a continuous downward spiral.
Economies around the globe started to slow down, some faster than others, stock markets began to drop, international trade declined, and credit tightened. In the United Kingdom for example, the catalyst for the economic crisis that engulfed the entire country was the Northern Rock Bank, which collapsed on September 2007, creating a precedent no one wished for: the first British financial institution to suffer a bank run in a time span of more than 150 years (Stuckler, 2008).
At the beginning of 2011, things appeared to look a lot better from a financial point of view and for a moment it seemed that the world economy