This report discusses the impact of the Big Bang financial crisis on the UK economy in the 21st century. It explores how financial markets affect economic activity and the consequences of deregulation. The report also provides references for further reading.
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BIG BANG FINANCIAL CRISIS
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Table of Contents INTRODUCTION...........................................................................................................................1 MAIN BODY...................................................................................................................................1 Financial market affect economic activity..................................................................................1 Big bang.......................................................................................................................................2 After big bang theory..................................................................................................................2 CONCLUSION...............................................................................................................................2 REFERENCES...............................................................................................................................3
INTRODUCTION Financial crisis refer to the situation when the investors are withdrawal the money from the saving account because clients have fear that the value of the assets is decline by the passage of time if they remain in the institutions(Asteriou and Spanos, 2019).In this report, there is the description of financial market affect economic activity in first decade of 21se century in UK. There is massive financial deregulation in the country. MAIN BODY Financial market affect economic activity Financial market helps in the flow of investment and saving across the country, it helps in the allocation of resources in a effective manner and production of goods. Financial market are those institutions like bonds, certificate of deposit and treasury bills for the investors to make decision regarding the investment. In the large institutions there is few securities is available with limited opportunities. Financial market affect the economy of the UK in the 21stcentury because it play a vital role in the production of goods and services. There are many signals are present for connecting the values and also help in international flow of funds from one to more country. Financial market affects- lack of financial transparency- By the lack of financial market means information related to the institution is not available shortly which result is there is increase in the risk for the economy(Boubakri, Mirzaei and Samet, 2017). Costly- Through financial market it made difficult for the investors to raise capital through markets because it is very costly by which there is low savings and investments. Diversified portfolio- it is difficult to maintain the portfolio in markets with limited seats of saving and investment. No regulation–Financial market help in stimulate the economy by use of various regulation of the government for solve the ethical issues and unfair lending practices. In the banks, they play a important role in the financial system, because banks helps in distribute of funds from saver to borrower, they help in maintain the GDP of the economy increase and efficient. 1
Big bang It refers to the day when stock market is deregulated from the London, it is the day when London Stock Exchange became a private company. There are deregulation in the UK banking system by the free market idea to reduce the force from the government and increase the productivity of their business. Deregulation involve legislation of the government and laws in the market. They help in removing the barrier between competition. After big bang theory After the big bang the city of London was deregulated and there is losses occur to single markets. After that there are abolishing of the minimum fixed commission on trades, allowing foreign client for owning brokers of UK(Keller, 2018). CONCLUSION From the above report it has been concluded that financial crisis is identify by reducing in the capital of the Bank, by reduce in private debt and increase in the students debt. Lot of financial crisis occur in the banks parts because of many recessions include in this. 2
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REFERENCES Books and journals Asteriou,D. and Spanos, K., 2019. The relationshipbetweenfinancialdevelopmentand economic growth during the recent crisis: Evidence from the EU.Finance Research Letters.28.pp.238-245. Boubakri, N., Mirzaei, A. and Samet, A., 2017. National culture and bank performance: Evidence from the recent financial crisis.Journal of Financial Stability.29.pp.36-56. Keller, E., 2018. Noisy business politics: lobbying strategies and business influence after the financial crisis.Journal of European Public Policy.25(3). pp.287-306. 3