INDEX INTRODUCTION …………………………………………………………....p.2 2. INTRODUCTION TO THE CRISIS .…………………………………...p.4 3. THE FINANCIAL AND CONSTRUCTIVE CAUSES. ………………...p.5 4. CONSEQUENCES 4.1. FINANCIAL MARKETS 4.1.1. 2007 ………………………………………………………….p.9 4.1.2. 2008 ………………………………………………………….p.11 4.2. CONSTRUCTIVE BUBBLE ……………………………………...p.12 5. GOVERNMENT INTERVENCION ON… 5.1. FINANCIAL INSTITUTIONS FEDERAL RESERVE AND CENTRAL BANKS ………………..p.19 5.1.2. EMERGENCY ECONOMIC
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the current financial crisis; part 2 briefly evaluates the possible causes; part 3 examines whether insufficient regulation was the primary reason to all other listed causes of the crises and thus can be regarded as the primary cause of the recent collapse; part 4 concludes. Even though lax regulation has contributed significantly to the origination and development of the crisis, by examining other possible causes I explicitly argue that it is the interplay of different factors that shaped
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Shadow Banking in China: Boon to Bane The shadow banking system is a term for the collection of non-bank financial intermediaries that provide services similar to traditional commercial banks. Shadow banking, in other words, is a system that is governed by a coterie of financial intermediaries that carry out traditional banking functions like borrowing and lending but in a way that is loosely connected with the traditional functions of depository institutions. Examples of important components of
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INDIAN FINANCIAL SYSTEM (IFS) – 3RD ASSIGNMENT 1. WHAT ARE MUTUAL FUNDS? -Mutual funds are investment strategies that allow you to pool your money together with other investors to purchase a collection of stocks, bonds, or other securities that might be difficult to recreate on your own. This is often referred to as a portfolio. The price of the mutual fund, also known as its net asset value (NAV), is determined by the total value of the securities in the portfolio, divided by the number of
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The Mortgage and Financial Crises: The Role of Credit Risk Management and Corporate Governance William W. Lang Federal Reserve Bank of Philadelphia Ten Independence Mall, Philadelphia, PA 19106 Phone: 215-574-7225 E-mail: William.Lang@phil.frb.org Julapa Jagtiani Federal Reserve Bank of Philadelphia Ten Independence Mall, Philadelphia, PA 19106 Phone: 215-574-7284 E-mail: Julapa.Jagtiani@phil.frb.org February 9, 2010 Abstract This paper discusses the role of risk management and corporate
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Literature Review The literature that will follow will include the reasons for the global financial crisis and what steps the government is taking to overcome or recover from the crisis. One of the main reasons emphasized in the following text for the crisis is lack of effective regulations. Moreover the most important financial alteration that various committee’s around the world are taking is strengthening the regulatory requirements on the financial institutions. Hereafter it could be settled
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The US subprime crisis era from 2007 to 2009 posed an unprecedented challenge to the US Federal Reserve (“the Fed”) as well as the outgoing Bush administration and incoming Obama administration. US Subprime Mortgage Crisis Crisis: Policy Reactions (“the Case”) provides us a glimpse of the actions by the Fed, the two administrations, as well as the support and criticisms for those actions. The US as a whole generally disregarded “common sense” leading up to the downturn and crisis. An overheating
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crisis after the Great Depression of 1930s. In September 2008, one of the most venerable and biggest investment bank, Lehman Brothers was forced to declare itself bankrupt, and the world’s largest insurance company, AIG collapsed. The financial collapses of these companies triggered the global economic crisis, with Asian stocks slammed by; stocks fell off a cliff and became the largest single point drop in history. These tragedies crushed the world’s economy and result in global recession. It costs
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UNDERSTANDING THE SUBPRIME LENDING The term "subprime" refers to the credit status of the borrower, which is being less than ideal. Subprime lending is a general term that refers to the practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history. According to the U.S. Department of Treasury guidelines issued in 2001, "Subprime borrowers typically have weakened
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AMERICAN INTERNATIONAL GROUP(AIG) COMPANY BACKGROUND AIG was started as a general insurance company by Cornelius Vanderr Starr in 1919 in Shanghai, China and begin a life insurance operation in 1921. AIG expand their business in mainland China by opening branches in Hong Kong, Vietnam and Philippines in 1925 and open the first office in New York in 1926. The organization spread their firm to Latin America in 1930-1939. During the world war 2, the business were suspended. Right after World War
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