Financial crisis essay

Financial crisis essay

The possibility of occurrence of the financial crises even in a stability economic environment was illustrated. Some would argue that the Financial crisis essay. Own to rent? Other developing countries were looking to follow their example, and indeed Indonesia and Philippines were straining at the leash to join the "tiger" club. Many people took out mortgages, thinking that this was a good time to buy a house, and many others took out mortgages hoping to 'flip' a house, financial crisis essay, or sell it for more than they paid for it, as they were convinced that it was impossible for housing prices to go down…, financial crisis essay. Financial crisis plays a huge role in countries going into a recession, and being unable to meet the demand for money. hile this presents significant opportunities for telecommunications, much of that spending comes in the form of cannibalizing, as wireline revenues have been decreasing steady over the past decade, matching the steady increases in wireless spending.

Essays Related To Global Financial Crisis

Many laws have been successful in restricting such practices in order to avoid a similar situation in the future. Today, "when a mortgage borrower wins a rescission case in court, the bank loses the right to foreclose, and has to give up all profits from interest and fees on the loan" Carter, However, just a few years after predatory lending caused so much damage, there are already movements to once again make it a possible scenario for contemporary lenders. The research posits that "under the Fed's new proposal, however, borrowers would be required to pay off the balance of the loan before the bank loses its right to foreclose -- that means borrowers could financial crisis essay lose their homes, even in cases where banks have broken the law" Carter, Only time will tell whether or not law makers attempt at reining in financial predators will actually work.

As of…. References Baker, Dean. The housing crash recession: How did we get here? html Carter, Zach. FED moves to gut predatory lending regulation. Huffington Post. html Geffner, Marice. Why the housing crash remains a wreck. aspx Holt, Jeff. A summary of the primary causes of the housing bubble and the resulting credit crisis: A non-technical paper. The Journal of Business Inquiry, 8 1 Yam states that it is "…gratifying that so many of the tools that we have been able to rely on, including the apparatus and contingency arrangements for ensuring liquidity, have been developed in a pre-emptive rather than a reactive way. On the various emergency measures, I am quite sure that in the fullness of time, financial crisis essay, these will financial crisis essay be turned into standing arrangements or withdrawn, hopefully financial crisis essay smooth exit strategies.

but, current sentiment is clearly demanding much closer regulation and supervision of banks over the longer term. Bibliography Bradsher, Keith Hong Kong Backs Bank Deposits for 2 Years. The New York Times. html Kumar, Phani V. Market Pulse, Market Watch. htm Hall, Maximilian J. Hall, Kenjeglieva, Karligash a. And Simper, Richard Environmental Factors Affecting Hong Kong Banking: A Post-Asian Financial Crisis Efficiency Analysis. Loughborough University and Hong Kong Institute for Monetary Research. Financial Crisis and Its Implications: Events Occurring Between and A Critical Literature Review The Roots of the Crisis Real Estate Valuation Bubble Sub-Prime Mortgages Low Interest Rates Moral Hazard in Regard to Consumer Spending Packaging Real Estate Loans as a Commodity Derivatives Market Interrelatedness Future Implications The financial crisis, which seemed to be elevated to its greatest extent world-wide between the years andis difficult to unravel.

The causes, financial crisis essay, interlink-ages, and effects are so intertwined that it is hard to separate them into a "first cause" or anything else that would resemble a succinct explanation. Although in retrospect, many individual underlying themes are attributed to the underpinnings of the crisis; in reality there are a plethora of variables that must be accounted for in trying to determine the crisis's root cause. Additionally, none of these factors can be considered in a vacuum. That is, none of…. Works Cited Asensio, A, and D. Focardi, S, and F. Fratianni, Financial crisis essay, and F. Konings, financial crisis essay, M. These borrowers had -- knowingly or not -- been financial crisis essay on a real estate market they did not understand.

Understanding the complexities of the real estate market and fiscal policy is complicated -- those who have grown up without access to the best education and who do not have experienced friends and family to help advise them in this process were the most vulnerable. Squires, Hyra and Renner showed that subprime financial crisis essay were able to segment their market by geography. Combined with the ethnic segregation that exists in most American cities, the outcome was simple -- minorities were targeted for subprime loans. The poor and working class were targeted by predatory lenders.

hen the crisis hit, it was these groups that suffered the most and foreclosure rates in these communities spiked. Works Cited: Squires, G. Segregation and the subprime lending crisis. EPI Briefing Paper. pdf Scott, J. no date. Shadowy lines that divide. Financial crisis essay crisis that emerged in came about because of a number of different factors that all contributed something to the problem. Ostensibly, this was a credit crunch. A credit crunch occurs when lender either no longer have money to lend or they are prohibited or unwilling to do so.

Mussa notes a truth that Adam Smith recorded that while money is an essential part of an economy's capital stock, it was not directly useful but rather indirectly useful through consumption or production. So what we saw with the credit crunch was that lenders were not lending. This brought about conditions where firms did not have access to the capital that they needed in order to grow. Then, financial crisis essay, of course, this became a contagion. orries about the economy slowing down due to a lack of credit had otherwise healthy companies cancelling projects and money that otherwise could have been….

Works Cited: Mussa, M. Adam Smith and the political economy of a modern financial crisis. Business Economics Vol. Poole, W. The credit crunch of Lessons private and public. Business Economics. In other words, there are few controls in place to ensure responsible spending or, in the case of Greece, that the books are not cooked. The implication of this is that Greece makes errors and commits fraud, knowing that the eurozone will be forced to bail them out or risk grave instability. The other nations are then forced to bail Greece out, because they share a common currency and therefore a common economic fate, but also because the Germans benefited from the high current account balance in the first place. There are a number of potential solutions. The eurozone could determine that addition by subtraction is a good strategy.

Despite the short-term instability, it would allow the zone to be comprised of major exporting and otherwise fiscally responsible nations. Throwing the PIGS under the bus may be difficult politically and cause severe harm in the short-run, but could benefit the…. Works Cited: Kulish, N. Opposition grows in Germany to bailout for Greece, financial crisis essay. New York Times. html Walberg, E. Euro crisis: Latvia and the PIGS. Global Research. IMF approves bailout for Latvia. stm Krugman, P. Anatomy of a euromess. The partisan politics seen south of the border would be impossible, because the resulting inaction would be viewed unfavorably by Canadians.

The financial crisis has damaged Canada economically, but it has also highlighted the value of financial conservatism. Canada's handling of the crisis has improved its standing in the world. The Canadian banking system has been lauded for its conservative nature. Further esteem has been brought to the government for its role financial crisis essay building a strong, stable banking system. Many economic observers have taken notice of Canada's successes and prescribed some of Canada's regulations as a future path for their own banking systems. Aside from banking, Canada is now showing some signs of economic weakness, financial crisis essay.

The country's relatively strength, however, has caused the government to take relatively little action on the crisis. This has not enhanced Canada's international standing, but it has not hurt it either. Canada has not needed…, financial crisis essay. Works Cited: No author. Gross Domestic Product. World Bank. pdf Uptigrove, Mark, financial crisis essay. Canada's Petro-Currency Cushion. html Zakaria, Fareed. Worthwhile Canadian Initiative. Financial Crisis Contemporary Social and Political Issue: The Financial Crisis The current recession financial crisis essay considered among the worst in U. As it has been characterized by policy experts, public officials and members of private industries alike, the U.

economy is experiencing a financial crisis which is surpassed at present only by the Great Depression which persisted across the s. This qualifies as perhaps the most pressing political and social issue of our times.

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Although the turbulence in the currency markets subsided by the end of , the real effects of the crisis still can be felt throughout the region. Many banks and industrial and also commercial firms went bankrupt and output fell sharply. But overall, the crisis was extremely painful for the countries that involved. Besides the Asian crisis , there are many other examples of crises. Which are not confined to emerging markets but occur in developed economies as well. Allen, F. html Kaminsky, G. Financial Crisis Essay Example Pdf. com, Jun 26, Accessed January 7, com , Jun Order paper like this. Did you like this example? Type your requirements and get professional help. Deadline: 10 days left.

Number of pages. Email Invalid email. A professional writer will make a clear, mistake-free paper for you! Stuck on ideas? Struggling with a concept? Get help with your assigment. Leave your email and we will send a sample to you. Email Send me the sample. Please check your inbox. Interested in this topic? Professional experts can help. Ask expert for help. Please indicate where to send you the sample. Didn't find the paper that you were looking for? Any subject. Pay if satisfied. Krugman, Paul. The Conscience of a Liberal. November Last retrieved on December 13, 2. Mankiw, Gregory. In Fed Policy, the Exit Music May Be Hard to Hear. Last retrieved on December 13, 3.

Spicer, Jonathan, Lange, Jason. Fed officials signal next policy battle: rate guidance. Global Post. Last retrieved on December 13, 4. Expansionary Policy. Last retrieved on December 13, Asian Financial Crisis of The economies of the so-called "Asian Tigers" were looked at with envy by the rest of the world in the early s. These Southeast Asian countries -- South Korea, Taiwan, Singapore, Hong Kong, Malaysia, and Thailand had shown impressive in most cases double-digit growth rates for the preceding decade and more; thus becoming "darlings" of liberal capitalism and globalization in the post-cold war era. Other developing countries were looking to follow their example, and indeed Indonesia and Philippines were straining at the leash to join the "tiger" club. Investors, bankers, and fund managers from all over the world were queuing up to be part of the Asian "economic miracle" -- and perhaps make a quick buck or two in the process.

What's more -- the "trickle down effect" was actually pulling the poverty line in the region steadily downwards giving rise to a growing and…. References The Asian Financial Crisis: Causes, Contagion and Consequences. Edited by Pierre-Richard Agenor etal. Global Economic Institutions. Cambridge University Press: UK Das, Dilip K. December, Retrieved on September 24, at. International Lending and Financial Crisis One of the major global financial crises is the financial crisis of The financial recession that occurred between and , encompasses the housing bubble that instigated the financial crisis, federal expenditure, and foreign exchange rates. Also, referred to as the 'Great recession', this global financial crisis had adverse impacts not only on the financial markets but also on the economies of nations across the globe, being the worst financial crisis in history.

The financial crisis emanating from the U. affected other nations owing to financial globalization and led to discussions regarding restructuring of the international financial system Ozkan, In particular, the global financial crisis originally started in and adversely impacted the financial sector of developed nations, especially in the United States, and subsequently had a detrimental impact of the real sector of affected nations as the financial institutions in the United States…. References Ahid, M. The impact of global financial crisis on Jordan. Three ethical dimensions of the financial crisis. pdf Boundless. Limitations of Monetary Policy. Objective of this paper is to argue that the CEOs of Bear Stearns, Lehman Brothers, Citigroup and Countrywide Financial did not take the interest of the companies into a consideration leading to frictions between the CEO and the shareholders In , the financial markets were shaken by a serious financial crisis because of a dryness in liquidity associated with a subprime mortgage business where people with doubtful credit reports were offered mortgage loans leading to a rise of loan default.

Moreover, lack of transparency, greediness and excessive desire for…. Reference Gorton, G. The Subprime Panic, National Board of Economic Review, Working Paper , Larcker, D. Lehman Brothers: Peeking Under the Board FaAade, Stanford Closer Look Series. Tucker, E. Associate Press. Wiggins, R. Piontek, T. The Lehman Brothers Bankruptcy: Overview. Yale Program on Financial Stability Case Study. Political Science Canada: Comparative Politics Canada, like any other nation suffered terribly from the effects of the global financial crisis. The economic impacts from Global Financial Crisis were resolved through Canada's political and provincial administration structures.

The Great ecession further intensified such trends towards elements of the precarious unemployment across Canadian provinces such as British Columbia mostly with certain population groups. This paper intends to illustrate how the global fiscal crisis has affected provincial economies in Canada. Global Financial Crisis Impact on Provincial economies The goal was to establish suitable forms of welfare states that mediated on the effects of forces of the global market forces through the determination of levels of state intervention within the provincial economic marketplaces. The liberal welfare regime in Canada as compared to the conservative one in Germany and social democratic from Scandinavian countries focused less on welfare provision and citizen security.

This translated into…. References Brownsey, K. The Provincial State in Canada: Politics in the Provinces and Territories. Peterborough, ON: Broadview Press. Ciro, T. The Global Financial Crisis: Triggers, Responses and Aftermath. New York: Ashgate Publishing, Ltd. Dunn, C. Provinces: Canadian Provincial Politics, Second Edition. Toronto, ON: University of Toronto Press. Farlow, A. Crash and Beyond: Causes and Consequences of the Global Financial Crisis. New York: Oxford University Press. Banking System The United States banking system has been around for quite a while. Indeed, the Bank of New York was founded in , a scant eight years after the United States was created.

The banking system has two major functions. First, they operate an overall payments system. Second, they facilitate and allow for financial intermediation. There was no formal financial system in the colonial states prior to the formation of the United States. The modern form of the banking system has only really been around since the early 's. The nascent form of the banks as they exist today was created by Alexander Hamilton. As of the inauguration of George Washington in , only three banks existed in all of the colonies. Generally speaking, banks are typically financial institutions that are chartered and regulated mostly by the state in which the bank or banks operate. The banking system of…. References Sylla, R. The U. Banking System: Origin, Development, and Regulation -- The Gilder Lehrman Institute of American History.

The Subprime Mortgage Market Collapse: A Primer on the Causes and Possible. Financial Derivatives This study emphasized the importance roles of financial derivatives, which has been known for the last decade and its effects on the Global financial crisis. It further analyzes the impact of financial derivatives and how it can be controlled to prevent corporations from incurring a lot of risks. It also explains the existence of financial derivatives since , to the recent Global Financial Crisis which occurred in the Risk is a feature associated with all productivity. As a result, financial markets adjust themselves to the fluctuation of exchange and interest rates.

Hedging risk, these corporations highlight the importance of risk management tools known as Derivatives. Derivatives are defined as financial tools providing investors with effective solutions when avoiding risk caused from market volatility Dodd, Financial derivatives are considered to be an effective risk management tool associated with Financial Engineering creating solutions to financial problems Marks, Works Cited Angel, James, and Douglas McCabe. Business Source Elite. Barth, Mary E. If asset bubbles can be leading indicators of recession, that begs the question what assets are the most important? Several studies have shown that housing prices are critical.

They were important in Japan and in in the United States. Babecky showed that housing prices consistently predict asset bubbles, minus the occasional false positive. Intuitively this makes sense since any sort of bubble will result in more investment in real estate. There is a further question that is raised in light of the contagion of the crisis. Prior to that, as Evanoff notes, several asset bubbles were effectively contained by monetary policy and did little damage. Most bubbles that cause damage do so in the developing world -- Southeast Asia and Russia in the late s for example -- but in the developed world the damage is usually contained. Frankel and Saravelos examined the indicators that…. Works Cited: Babecky, J.

Leading indicators of crisis incidence. European Central Bank Working Papers Series No. Chinn, M. The predictive power of the yield curve across time. NBER Working Paper, No. Evanoff, D. Asset price bubbles: Lessons from the recent financial crisis. World Financial Review. Can leading indicators assess country vulnerability? NBER Working Paper No. Financial Analysis of Lehman rother Lehman rothers The history has been full of financial collapses and financial scandals and one of the biggest financial collapses that a company has ever seen was that of Lehman brother.

The collapse of a firm as huge as Lehman rother and a firm which has such great experience of over a hundred years lead the world into a shock. It created doubts in the minds of people regarding the condition of other financial institutions. The history of Lehman rother is rich which is further discussed. The history of Lehman rother dates back to , when a boy named Henry who was a year-old son of a cattle merchant who immigrated to the United States from Germany and he settled in Alabama State of the United States where he opened dry goods store. In , when Henry Lehman's elder brother arrived to Alabama, the firm…. Bebchuk, L. The Wages of Failure: Executive Compensation at Bear Stearns and Lehman Blake, D.

Financial Market Analysis. New York: Wiley. Cetorelli, N. The Evolution of Banks and Financial Intermediation: Framing the Analysis. Dwyer, G. The Financial Crisis of in Fixed Income Markets. Fitzpatrick, T. How Well Does Bankruptcy Work When Large Financial Firms Fail? Some Lessons from Lehman Brothers. Conduct a benchmarking analysis As explained by Prasnikar, Debeljak and Ahcan benchmarking depends on comparing between two activities of an organization and another. In our case, we shall compare McDonald's activities and those of its competitors, Burger King and Wendy's. To this end, the corporation has adopted some best practices that include sustainability, nutrition and well-being, employee experience ad environmental responsibility.

Accordingly, McDonald's protects the environment by going green and using methods that protect and conserve the environment. McDonald's also encourages its suppliers to uphold effective environmental. The company treats it employees well and offers them good working conditions as a way retaining them. Employees are offered training and promoted accordingly. McDonald's also adheres to ethical conduct its operations and food items are produced ethical. Similarly, the company…. These funds are now removed from the banking system. Keep in mind that banks use every dollar on deposit to create many more dollars worth of loans, the hit to the banking system and by extension, to the money supply is something approaching 25 to 30 billion dollars.

This was a global phenomenon, as the crisis arises interest rates are slashed. So hence, by the Federal Reserve, Bank of England to many others have pushed interest rates close to zero. He also explains how major players like Mr. Bernake and the Treasury Secretary Henry Paulson affected the crisis and how the steps and how they have left their mark on this financial crisis. He also contends that all crisis have an ebb and flow in their severity and rarely hit once and subside. He vilifies our toxic waste method of having recourse to non-recourse government loans and in the…. The decision of investing or not here then depends on the personal adversity to risk of each individual investor.

The general theory states that each investor should construct a diversified portfolio, which adequately balances high risk-high gain shares with medium or even low rates of risk and gains Hagin, New Zealand could then be assimilated with a medium risk-medium gain share, and as such would be perceived as a valuable addition to one's portfolio. In this order of ideas then, the recommendation would be that of investing in the country. eferences: Amadeo, K. htm last accessed on December 17, Hagin,. pdf last accessed on December 17, Malkin, B. References: Amadeo, K.

htm last accessed on December 17, Hagin, R. html last accessed on December 17, Bank of America and Merrill Lynch would have to be separated and Goldman Sachs could no longer be a bank holding company. The government, in return, would rescue banks that fail. On the other side of the wall, investment houses would be free to buy and sell securities for their own accounts, borrowing to leverage these trades and thus multiplying the profits, and the risks. Being separated from banks, the investment houses would no longer have access to federally insured deposits to finance this trading. If one failed, the government would supervise an orderly liquidation.

None would be too big to fail -- a designation that could arise for a handful of institutions under the administration's proposal" Uchitelle, "Volcker," The Volcker proposal seems sensible,…. Works Cited Dash, Eric. Post-mortems reveal obvious risk at banks. November 18, December 5, html "Geithner criticizes Wall Street pay. Had the organization employed the techniques of activity-based costing, they would have realized the need to change their approach and had started manufacturing small size and fuel efficient engines, as most of the customers were requiring these items.

Unlike absorption costing, marginal costing uses the traditional division into direct, indirect, fixed and variable costs. The accounting method sees that the final marginal cost of a product will be calculated by summing up the direct costs of labor, the direct costs of materials, the direct expenses and the variable overheads Brown. The applications of marginal costing revealed that Ford was able to support a price advantage relative to General Motors and Chrysler due to its…. References Bernstein, L. Aside the attraction of customers, the money invested in marketing have created the desired outcome of a strong and reputable brand. Another pivotal element in the financial strategies has been that of maximizing the efficiency of managing inventories. This was necessary in order to continually strengthen the brand as well as achieve the profitability goals.

Alongside with operating principles, supply-chain renovation and inventory management, financial management represents the pillar of the Nike business model Filbeck, Krueger and Preece, Discussion It is extremely difficult to generalize the approaches of multinational organizations to financial management as each individual entity will employ those courses of action which best suit its needs as well as its characteristics. Whilst Ford continued to invest its resources in the manufacturing of large and luxurious vehicles in an attempt to drive the market, McDonald's has recognized the necessity in satisfying customer needs and has as such…. References: Adams, B. html last accessed on July 13, Filbeck, G. Quarterly Journal of Business and Economics, Vol.

During times of extreme pressure from the supply or demand side, the central bank is prepared to go in and support the currency, to help provide stability. This is significant because traders around the world; will use the major currencies as a way to hedge themselves against different risks. Where, they will view the weakness of one country's currency as a sign that they could be facing a number of different economic challenges. Fixed vs. Floating Exchange Rate, a good example of this can be seen with the ritish pound, where the ank of England decided to keep interest rates at.

This is important, because the increase in rates could be seen as a sign that economic stability could be returning to the country, which would help to reverse the downward pressure on the pound. However, the fact that they decided to keep interest rates unchanged, means that…. Bibliography 12 Myths of International Trade, , Meti, viewed 3 May , Bank of England's Decision Affects Pounds Performance, , to Forex News, view 3 May , Bretton Woods Agreement, , Investopedia, viewed 2 May ,. Floating Exchange Rate, , Article Base, view 3 May ,. Financial estatement was a stellar year in terms of corporate financial restatements; just U. March 1, However, for Citizens First Bancorp Inc.

October 20, Second a regulatory action by the Federal Deposit Insurance Corporation FDIC , which involved allegations of "inappropriate behavior at the company, including removing unfavorable appraisals from the loan files, in an attempt to avoid the recognition of additional loan losses" Barba,. The FDIC required Citizens to…. References Alloway, T. November 4, The deferred tax asset disaster. Financial Times. Regulators' views force restatement. American Banker. Indeed, risk-seeking is pervasive in the financial industry, as competition compels banks to seek higher returns. Regulation such as capital requirements can help to reduce risk-seeking behavior, although the negative affect such regulations have on value can ultimately encourage at least some degree of risk-seeking.

Despite this unintended potential consequence, regulation serves to neuter overly aggressive bankers and reduces risk in the banking system. Reducing the risk in the banking system is congruent with the government's objective of making effective use of taxpayer money. A fourth consideration is that consumers demand regulation. hile this does not constitute an economic case for regulation, it must be understood that governments are not motivated by purely economic considerations. Consumers want to know that their deposits are safe and that they can access money when needed for homes, vehicles and small businesses.

Consumer demand, while irrational, is a key driver in the level of…. Works Cited: Llewellyn, D. The economic rationale for financial regulation. Financial Services Authority. Retrieved November 13, Hellmann, T. Liberalization, moral hazard in banking, and prudential regulations: Are capital requirements enough? The American Economic Review. In legislation was presented by Ralph Klein to the legislature, demanding that provinces be permitted to allow private hospitals. That same year, more budget cuts slammed the health systems, when the "Federal udget offers 2 cents for health care for every dollar of tax cuts. Their report was presented in Ottawa towards the end of the year, and in some of its suggestions regarding intelligent use of federal funding were implemented.

The commission, in general, supported the continuation of universal care. However, the "Health Accord" did not include any ruling against the use of federal funding contracted out to for-profit institutions a situation that some critics claim is part of the…. Health Care in Canada. Canadian Institute for Health Information: Ottawa, Choudhry, Sujit. In this regard, the author rightfully targets circumscription of the authority of the major agencies that are responsible for rating private credit which allowed banks to approve many mortgage situations with citizens that were tenuous, at best. The commission was widely vilified for not playing a more active role in limiting the unscrupulous behavior of banks that lured investors into poor mortgage situations no author, Ultimately, oudini proposes increasingly strident measures of….

References Barrett, P. Crisis Economics: A Crash Course in the Future of Finance. New York: Penguin Press. Sunderland, R. According to these analysts, "The implicit assumption underlying the price-to-earnings method is that the fair market value of the closely held business can be approximated from the market value of comparable publicly traded businesses. To implement this method, the valuator must be able to identify a set of presumed-to-be comparable publicly traded companies and obtain sufficient information on each to verify the extent of comparability from an economic, management, and financial perspective. No publicly traded company will be precisely comparable to the closely held business being valued, so informed judgment must be exercised" p.

As a general rule, the smaller in size and the more limited the scope of activities of the business being valued, the less likely there will be a set of publicly traded companies that are comparable, or even a single comparable publicly traded company. Publicly traded companies are for the most part large, measured in…. References Allen, M. The article that was written by Conley discusses the impact that collateralized debt obligations CDO's would have upon the subprime loans. These were created in , by the Wall Street firm Drexel urnham. In this product, the investment bankers would take a number of different articles and combine them together as one investment.

The various assets that were used included: junk bonds, mortgages and other high yielding investments from the debt. The idea with these different products is that the investment bank could offer customers a stated return on their investment. The way it worked is the brokerage firm would distribute each investor, the stated amount of returns that they would make off of the tranche the CDO investment. This was derived using a complex mathematical formula that would divide the total amount of interest that was received, from the various high yielding products that were inside the CDO. Bibliography Case Study, , Investopedia.

Available from: [14 February ] Citi Merger a Mistake, , Huffington Post. Available from: [14 February ]. Deregulation Redux, , FCIC. Available from: {14 February ]. Derivatives, , Financial Dictionary. Available from: [12 February ]. It was irresponsible for banks to operate from a position of absentee management, and the careless ownership enabled reckless conduct from their "agents" who ran the day-to-day operation. While some blame must be placed on the public for continuing to spend at outrageous rates, the bank itself promoted and enabled such activity. Blankfein's argument that no one had been arrested is irrelevant since the issue at hand is whether the financial industry was responsible, not whether bank officials should be arrested.

Banks made profound miscalculations concerning interest rates and loans, and should have been aware that their business practices were not feasible toward long-term success Murphy. Issue 7 places the theories of authors oger Lowenstein and obert Samuelson against one another. Lowenstein contends that government should bail out economic institutions; however, he does not argue that bailouts are necessary in order to assist the careless companies, but instead asserts that…. References Newton, L. Taking Side: Clashing Issues on Business Ethics and Society. New York: McGray Hill. Murphy, a. An analysis of the financial crisis of Causes and solutions. Andrews, E. Greenspan 'shocked' that free markets are flawed.

International Herald Tribune. financial system trials tribulations starting early Indicate major reasons contributed financial market's collapse. Please leave a space reason. The Federal eserve dropped interest rates to historically levels after the September 11 terrorist attacks and the dot. com bubble burst. This was to generate more spending and borrowing and propel the nation out of recession. Low interest rates encouraged people to buy on credit. Many people took out mortgages, thinking that this was a good time to buy a house, and many others took out mortgages hoping to 'flip' a house, or sell it for more than they paid for it, as they were convinced that it was impossible for housing prices to go down….

References Shah, A. financial statements of Marriott Hotels and discusses measurement bases they employ. The essay also surveys the literature for current thinking on fair value measurement. According to the International Financial Reporting Standards IFRS , measurement "involves assigning monetary amounts at which the elements of financial statements are to be recognized and reported" Deloitte, Accounting measurement consists of quantifying financial information in dollars or units. These measurements are then used to report information to internal and external users through the use of financial statements that accountants prepare. Financial accounting measurements may be recorded at historical cost or adjusted to reflect current market values Conjecture Corporation, Generally Accepted Accounting Principles GAAP require companies to record balance sheet information using a fair value accounting measurement.

Companies must therefore use this measurement technique to value assets and equity investment at the current market rate which thee items would bring if they sold in an…. Works Cited Barth, M. Including estimates of the future in today's financial statements. BIS Working Paper No. The use of fair value in IFRS. Accounting in Europe 3, pdf Conjecture Corporation. What is an accounting measurement? Many subprime mortgages were made with little documentation of income or ability to repay, or other elements that typically safeguard loans of all types and mortgages especially. There have even been cases of widespread fraud, where documents were falsified in order to approve loans.

The reason many lenders were so eager to make these bad loans is that they weren't ultimately going to be responsible for them -- the loans were bundled into groups and sold as "mortgage backed securities," so instead of dealing with many individual loans worth an average of a few hundred thousand dollars, banks and other institutions were dealing with bundled groups of these bad loans worth millions of dollars apiece. Companies like AIG made money in the short-term by providing insurance policies for these mortgage backed securities, as well. Eventually, however, people with loans they couldn't really afford began to default, either because they simply….

Another significant factor that affected the financial crisis of was role that Wall Street played in worsening the impact of the financial disaster that was to come. Specifically, a number of prominent Wall Street companies effectively "bought in" to the housing shortage by investing in securities that are financially supported by loans of a dubious nature. A recent report compiled by the Financial Crisis Inquiry Commission alludes to the fact that such investors were well aware of the substantial risk that these investments represented, yet pursued them anyway due to avaricious tendencies Chan, The involvement of banks in the financial crisis goes well beyond issuing loans that were of a suspect nature to people who required subprime loans. To that extent, this degree of culpability on the part of banks can actually be traced to the Securities and Exchange Commission, another federal government entity, that was decidedly lax….

Bibliography Chan, S. html Davis, J. stock market and the Banks promote economic growth and it provides a critique of their functions in transitional economies. Every country depends on its economy for its growth. For a country to be stable it has to be stable in terms of its economy. Bank and stock market contribute to a great extent to the economy growth of every country where it provides firms with opportunity to get funds thus encouraging more investment from the firms. At the same time they give information on the ways resources should be allocated. The development of a financially sound, market-oriented banking system is always considered to be fundamental to a flourishing transition.

Arguably, it is important to macroeconomic stability and to positive long-term growth prospects. As documented, bank intermediation in transition economies continues to be stunted after a decade or addition of reform, mainly where advancement in banking reforms is inadequate. The banking…. Bagehot, Walter. Homewood, IL: Richard D. Irwin, Edition. Bresharan, T. Financial Case Study Company Overview McDonald Corporation specializes in the food service globally. The company started operation in , and in , the MacDonald registered its trademark. The primary product of McDonald includes chicken, hamburgers, soft drink, French fries, dessert and milkshakes. Over the years, the company has expanded its menu and included wraps, fish, salads fruits and smoothies.

Presently, the company operates its business through either affiliate or franchise globally and the company realizes bulk of its revenues from the fees collected from franchise. Moreover, the company derives its revenues from the royalties and rents. Since MacDonald has started operations, the company has enjoyed rapid growth. The company operates in countries and…. Reference McDonald. Morning Star McDonald's Corporation MCD. Crisis Incidents The last decade has been riddled with crisis on the global as well as domestic scale. Crisis on many fronts have been noticed for instance natural calamities, terrorism issues, scandals, technological issues and financial disarray. Even so, most leaders aren't fully up to the task in terms of leading a company or society, in general, out of a crisis successfully.

Experts at the start of this decade went hand in hand to eliminate the Y2K bug, which became the first Internet crisis. On September 11, , the terrorist attacks in New York City on World Trade Center threw U. off balance. Next, the Katrina Hurricane struck with full vengeance in the gulf region which tore apart communities as we know it. The Tsunami of was another tragic event which rendered millions of people homeless. Last but the not the least, the recession of shutdown major corporations…. References OECD , OECD Reviews of Risk Management Policies, Future Global Shocks, Improving Risk Governance, OECD Publishing.

Dezenhall, E. Damage control: Why everything you know about crisis management is wrong. Portfolio Hardcover. Erickson, Paul A. Emergency Response Planning for Corporate and Municipal Managers 2nd Ed. Burlington, MA: Elsevier, Inc. Barton, L. Crisis leadership now: A real-world guide to preparing for threats, disaster, sabotage, and scandal. New York, NY: McGraw-Hill. he only observation that could be made here is that one would expect a larger proportion of the total expenses to be allocated to research and development, given the fact that this is such an important part of Microsoft's activity and essential in order to obtain a competitive advantage on the market. his means that the I industry is not one supporting production on stock. At the same time, the value of the total fixed assets is significantly high, which can be partly explained by the size of the company and the investments in land, buildings and equipment.

Part III…. The return on assets at Microsoft was 0. As most of the other profitability and asset management figures, the return on assets also shows a better performance in Part IV -- Conclusions and Recommendations Microsoft's results, both in terms of absolute value from the income and cash flow statements and balance sheet and the ratio analysis, show a solid, extremely competitive company, whose results have improved from to , despite the global economic crisis. Its capacity to retain low levels of inventory, to gradually increase its efficiency in using assets and to bring new products to the market are some of the positive aspects at Microsoft. As a recommendation, the company could consider allocating a larger proportion of its expenses into research and development.

As noted, the leverage is deliberate, and probably is designed to deliver these ROEs to shareholders. Nordstrom shareholders must rely on capital gains to a greater extent. In addition to the financials, it is important to consider what recent news might affect the viability of working in these firms in the future. There are no major news stories for either company. Essentially, both are still growing firms, with a moderate growth pace. Nordstrom is still focused on the North American market,…. Works Cited: MSN Moneycentral. Miami Herald. Thus, 10 trillion dollars problem is not as large and scary if we start acting today to fix the current system.

It is totally manageable. ush's administration is trying to introduce private account systems where a fraction of payroll tax will be transferred to private accounts and managed by the future retirees themselves, thus, giving them chance to invest this money into stocks, which have proven to give on average higher rates of return than the Treasury ills which generate rather moderate income. The opponents of this idea state that this is just a shell-game, where no capital is accumulated and investments are not increased. The overall national capital is not increased, but this plan will cause enormous transactions costs…. Washington, D. Jan 23, Crisis Negotiations Ebert believes "there is absolutely no justification for preventing mental health professionals from participating in virtually all facets of hostage negotiation," p.

With this training, the mental health professional is thus theoretically prepared to engage the perpetrator directly. However, the mental health professional is only prepared when the training provided is thorough and consistent, and in accordance with the parameters and goals of each crisis situation. The pros of employing a psychologist as a primary negotiator are clear. Most significantly, the psychologist has expertise in human behavior and cognition and can apply that knowledge to making quick decisions. The psychologist can also provide post-traumatic stress intervention services to the hostage victims and…. References Ebert, B. The mental health response team: An expanding role for psychologists.

Professional Psychology, Research and Practice, 17, 6, Hatcher, C. Behavioral Sciences and the Law, 16, Financial managers and CEO's play important roles in ensuring that organizations meet their specific goals. The skill levels for both positions are high and require a great deal of patience and experience. The purpose of this discussion is to determine whether being a financial manager is the best preparation for later becoming a CEO. ole of the Financial Manager According to the Bureau of Labor, financial managers must have a bachelor's degree in a field such as business administration, accounting, economics or finance. Although, as the business world becomes more competitive, organizations are requiring financial managers to have Master's degrees and a great deal of experience before they can become financial managers.

The Bureau also explains that financial managers are vital to the success of any organization and their jobs involve supervising the preparation of financial reports, direct investment activities, and implement cash management strategies. As computers are increasingly used…. References Campbell, M. Healthcare Financial Management Association Apr Financial Managers. Bureau of Labor and Statistics. The Industry The telecommunications industry is highly competitive in both the landline and wireless segments. By , wireless spending had match wireline spending. hile this presents significant opportunities for telecommunications, much of that spending comes in the form of cannibalizing, as wireline revenues have been decreasing steady over the past decade, matching the steady increases in wireless spending.

There are four major wireless operators in the U. And over regional players Megna, Competition is based on coverage area capital investment , price and customer service. Both firms can be considered industry leaders. Verizon had…. Works Cited: MSN Moneycentral Verizon. Financial Ratios Tutorial.