Case Study of Financial Crisis of 2008
Added on -2020-07-23
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ContentsINTRODUCTION...........................................................................................................................1MAIN BODY..................................................................................................................................1CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
INTRODUCTIONIn this present world, banks have an important role in managing cash inflow and outflowin economy. Banks are those financial institutions, which are established for the purpose ofacceptance deposits and lending money to public. In this light, there are various functions whichare performed by bank (Caputo, 2010). It includes accepting money and deposits from public orcompanies and lend them credit by way of loan and another advances. In this report, the case of“Bankers bonuses were to blame for crisis in 2008” will be given effect. Moreover, its impacts,reasons and causes will also be demonstrated in this present report. MAIN BODYBanks are one of the significant financial institutions which are liable to lend money andaccepts deposits from public and business corporations. It can be said that, banks wereestablished in UK, with main objective to conduct current accounts for its respective customersand companies. Also, it involves to pay cheques and demand drafts on a person on behalf ofanother person. In this light, it can be considered as most important part which regulatesfinancial aspects of a country. In this light, sometimes financial crises can also occur due to mis -operations of the company (Field, Jayachandran and Pande, 2010). In this light, the bankingcompanies to handle its operations in an effective manner, so that they cannot hinder economicperformance of a country. With reference to the case of Financial crisis of 2008, which was a result of bonusesgiven by Banking institutions and companies. In this light, recent crisis and issues in terms offinance had been occurred in 2008. It has been evaluated that during the period of fall out in2007 -2008, there are number of policies and documents which are reported with several causesand other reasons responsible for crisis. In addition to this, the chairman of Financial servicesauthority just has reclaimed that the main reason behind financial crisis and issue in the year2008 is inadequate and inappropriate structure of incentives (Groebner and et. al., 2011). On theother hand, in accordance with the view point of US Financial Enquiry commission, it can beheld that there are several issues of Financial calamity, which involves non effective corporategovernance and short term profits and gains. Brief summary of Financial crisis, 20081
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