Global Financial Crises: Causes, Impacts, and Government Policies

Essay response and analytical
response

INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Analytical response also referred as a positive approach for reader, and it depending on
the context and how it tell the thoughts on any subject or concept based on any form of written
research, question or analysis. This essay is based on the Global Financial Crises (GFC) which
affects the overall word economy. It cover the several aspects such as cause of global financial
crises overall global economy, importance as well as impact of inverted yield curve in relation to
this crises. In addition, it includes the other several impacts which are related with the topic and
how government can resolve it through making effective policies.
MAIN BODY
Global financial crisis was triggered largely by financial-sector deregulation. That allowed
people to offer in hedge fund financial derivatives. Financial institutions then requested more
mortgage loans to back these derivatives' profitable sales. They generated interest-only loans
which were accessible to lenders who were subprime. In 2004, even as the house prices on these
residential loans adjusted, the Federal Reserve increased the fed funds limit. Housing rates began
to decline in 2007, when demand outstripped supply. That stuck landowners who had not been
able to finance the payments but still couldn't sell their property. When the securities' prices
crumbled, lenders halted each other's borrowing.
Global financial crisis increased frequency after bankruptcy in September 2008, Lehman
Brothers made financial and economic situations very complicated for the international economy
such as for the global banking system and for central banks. For centralized banks and financial
regulatory structures, the collapse from the latest global financial crisis may be an era shifting
one. Therefore, it is absolutely critical that they correctly define the causes of the current
economic crisis so that together they can consider (Alqahtani and Mayes, 2018). First, effective
interventions and processes for urgent crisis resolution and second, recognize the gaps between
nations about how they are being affected. Finally, consider the longer-term consequences for
monetary policy and financial support frameworks.
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