Financial Crisis Report: UK, Big Bang, and Economic Changes

This report provides an overview of the UK's financial crisis, focusing on the impact of financial markets on economic activity in the first decade of the 21st century. It examines the Big Bang deregulation of 1986, the mortgage crisis of 2007, and their consequences. The report explores the role of banks, financial deregulation, and the use of the international money market. It also covers the structure of the traditional mortgage banking system, the flow of money, and the events during and after the Big Bang. The conclusion summarizes the key findings regarding the causes of the financial crisis and its implications for the UK economy.

BIG BANG FINANCIAL
CRISIS

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 21st century
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.
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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.
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REFERENCES
Books and journals
Asteriou, D. and Spanos, K., 2019. The relationship between financial development and
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.
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