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The Global Financial Crisis

   

Added on  2020-07-23

11 Pages2870 Words36 Views
The Global FinancialCrisis

Table of ContentsINTRODUCTION...........................................................................................................................1Possible cause of financial crises:...............................................................................................1Scale and impact of GFC in different countries..........................................................................4CONCLUSION ...............................................................................................................................6REFERENCES................................................................................................................................8

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INTRODUCTIONThe global financial crisis is considered as one of the worst phases in global financesector. This was the phase which is known as “Great Recession” (Bresser-Pereira, 2010). Thisreport highlights the scenarios which were occurred the crisis. There are factors which wereresponsible for the crisis and the solution factors explained in this report. It is the mostsignificant worldwide economic disaster after 1929. Mortgage crisis is one of the subprime crisisevents which are discussed in this report. Possible causes and of the financial crisis and its futurepossibilities are defined in this report. Its scale and impact are defines in respect of economicstructure of various countries. Actual reforms are eventuated with practically subject toscenarios.Possible cause of financial crisesThe financial crises started in 1929 which led to sudden fall of stock market and globallydamage the whole market system. It leads to long lasting recession and unstable microeconomicspolicies as well as excessive credit boom and large capital inflow and balance sheet fragilitiesduring the 1923 and 1932. The GDP falls up to 15%. By comparing, there is reduction of 1% inglobal GDP between 2008 and 2009 during the depression has been said that by the newspaperall over the world that the countries have overcome in 1930 when credit was tight and mortgagewere herd to sell. Therefore, in order to revive the market, the government had to step in to formof many regulation and laws. Although, most of nation affected of great depression and it iscontinues till world war. The rise in consumer debt reflected the response of consumer to the lowinterest rates due to this the undeveloped country badly affected from this crises has the majoradverse impact as the personal income, profits and prices fell down during the global tradedropped out by more than 50% .Unemployment rose up to 25% in US and after some year it roseto 33%.Cause of financial crisisThe financial crises is also known as the global financial crisis. There are various factorwhich led to financial crises are as follows:Subprime mortgage bubble:

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