Evaluating Global Financial Crises: Impact, Globalisation & Prevention

This report provides an overview of global financial crises, examining their potential types, the impact of globalisation on their depth and frequency, and methods for prevention. It identifies credit crises, financial crises, fiscal crises, and currency crises as potential future threats, detailing their causes and consequences. The report discusses the impact of globalisation, including reduced global trade, unemployment, and falling export/import activities. Effective macroeconomic policies, such as fiscal and monetary discipline, infrastructure development, and support for small and medium enterprises, are highlighted as key prevention methods. The report concludes that financial crises negatively affect global development through mismanagement of capital, leading to unemployment, decreased investment, and economic deficits, emphasizing the importance of maintaining and managing finance and capital effectively.

Global Financial Crises

Table of Contents
Introduction...............................................................................................................................................3
The potential type of future crisis............................................................................................................3
The impact of globalisation on crises, their depth and frequency..........................................................4
Prevention methods of global crises.........................................................................................................5
Conclusion..................................................................................................................................................6
REFERENCES..........................................................................................................................................7

Introduction
In the last 200 years there has been financial crises for four times that have effected to multiple
regions around the world . When these things happen it has a huge effect on the economic
growth of the world and on the life of everybody who is around the financial crises
(Cadogan,2010). These kind of crises have their effect for years and sometimes decades , the
deeper psychological effect of this thing may stay for decades . There are a lot of ways to that
lead to build up of these kind of crises. The different trip wires that occur that make the crisis get
worse. The present report is based on the global financial crises and its impact on the business
and growth of the country. Therefore, it is the responsibility of the government is to make
effective policies which can help to overcome such crises and so that they can attain their long
term goals in an effective manner (Peters,and et. al.,2012).
The potential type of future crisis
It is essential for the international business is to identify the future crises so that they can
analyses these global factors so that they can overcome the future risk on the business. there are
various tools and techniques for the government of the particular country is to analyses these in
an appropriate manner. financial crises having a large impact on the business and its future
performance (Chor,and Manova,2012.). Therefore, it is the responsibility that they make various
corrective measures in order prevent their economy from any potential types of crises on the
country. There are various global economic crises as given below:
Credit crises: This is one of the major crises which is related with the financial sector. It refers to
the lack of money and credit for banks and various financial institutions. It having a large impact
on the employment of the banking sector which can overcome the growth rate of the country.
The financial crises 2007-08 is the example of such crises where the banks found that difficult to
gain the access of credit. In order to prevent such crises, the government required that to make
effective economic policies which can help to provide a consistent growth and development to
the country.
Financial crises: This is another part of credit cries which Having a wider impact on the
country’s economic situation. In this kind of crises, the banks and financial institutions are
unable to manage their funds and the consumer not being able to borrow money from the banks

due to lack of funds (Aloui,Aïssa,and Nguyen, 2011). For example, Financial crises Asia 1997 is
one of the example where the debts crises in the Asian countries from inappropriate borrowing
by the private and public sector. If the high growth rate and booming in the private sector such
crises can be arises in the country.
Fiscal crises: This is another types of financial crises where the government is facing crises.
There are various international institutions such as International Monetary Fund and World Bank
which are provide funds for the development and infrastructure. But some times mismanageable
of funds which can leads to create such crises. In such conditions they required to use effective
policies so that they can maintain their growth and development which can leads to create an
ideal image at the global level. The government also needs to cut their expenditure which can
leads to decrease deficit level (Brinkman, and et. al.,2010).
Currency crises: A currency crises occurs when there are drastically falling the value of
currency. Where the foreign direct investment going down. However, in the case of Greece, the
value of that currency fell very rapidly where the public and investors lost their confidence in the
financial sector. It having a adverse impact on the long term economic growth of the country.
Therefore they required to take corrective decision-making in order to overcome such crises in
the near future.
Thus, the role of various organisations and countries that they use various tools and techniques
so that they can determine such crises and use their corrective measures which can help to
prevent the impact which is too significant for them.
The impact of globalisation on crises, their depth and frequency
It is essential for a country is that they have to forecasting their economy so that they can make
effective decision-making in order to maintain long term growth and development (Fratzscher,
2012). There are having a large impact of global crises on the globalisation. It can impact the
growth rate and its future performance. These impact as given below:
Reducing global trade: This is one of the major impact which is related with the trading
activities. Due to financial crises people having low confidence in the market which can leads to
reducing the demand of goods and services. Today, all countries are inter liked with each other
therefore, they if any state is facing such crises it will be direct and indirect impact on the other

nations. It cal leads to reducing trade and business (Baker, 2010). For example, due to financial
crises of the US the international trade was reduced drastically which is not good for the bout
developed and developing countries.
Unemployment: Unemployment is the result of existing financial crisis occurring in the present
scenario which affect the overall society external and internal factors. Basically financial crisis is
a result of decrease in the private and existing companies because capital is a backbone for every
sectors so if there is a occurrence financial issues then it may definitely resulted in the
unemployed or state of undeveloped country. Apart from this due to shortage in fund creates
many problems and issues by increasing the risk and uncertainty for the existing firm and
somehow it is very difficult for their survival as every organization requires accurate fund .
Falling export and import activities: This is another major impact on the globalisation. The
international trade is depends on the export and import. There are various countries which are
dependent on the other country for various aspects. Each and every country is having their
competitive advantage (Chor,and Manova, 2012). They can also get the large number of foreign
currency through international trade. But due to global financial damage the demand of goods
and services are reducing which having the impact on export and impart.
Prevention methods of global crises
There are various methods which can be used by them in order to prevent such crises. For global
financial crises required a collaborative efforts and effective economic policies. These are:
Macro economic policy: This is one of the major tools which can be used by the countries in
order to prevent any future crises (Czinkota, Ronkainen, and Zvobgo2011). Fort this they
required to focused on their various polices such as fiscal and monetary and try to maintain
economic discipline. They try to reducing their international debts which is too essential. They
also required ton control and attain their fiscal deficit. Apart form that they also required that try
to increase infrastructure and support small and medium enterprises. They can help to support
local and national economy and also create a large number of jobs. It can help to increase the per
capita income of the individuals which also enhance their standards of living. It can help to
increase the demand of goods and services which is too essential in the economy (Peters, and et.
al.,2012). Further, there are various economic forecasting tools and methods which can be used

by them in an appropriate manner. There are various historical data which can also be used by
them.
Conclusion
As per this project report, financial crises are affecting negative way at global level. Financial
crises raise through UN-management of the capital or fund, not proper control, less managing
power and not working in proper and systematic manner. These all are affecting on global
development of the country. Through this situation become low employments in the country,
investors are not properly able to invest in the market, market of money will be down in this
situation, employees has no any jobs , economy of the country become decrease and this will
become deficit at the level. Financial crisis is the difficult situation for all countries, its create
many problems and issues for the country and its hard to handle because without capital and
finance no one country will survive in the effective manner. In the other hand, finance and
capital of the country should be maintain and manage on all activities and system to investing
fund in the market.

REFERENCES
Books and Journals:
Peters, G.P., and et. al., 2012. Rapid growth in CO2 emissions after the 2008-2009 global
financial crisis. Nature Climate Change. 2(1). pp.2-4.
Chor, D. and Manova, K., 2012. Off the cliff and back? Credit conditions and international trade
during the global financial crisis. Journal of international economics. 87(1). pp.117-
133.
Baker, A., 2010. Restraining regulatory capture? Anglo‐America, crisis politics and trajectories
of change in global financial governance.International Affairs. 86(3). pp.647-663.
Fratzscher, M., 2012. Capital flows, push versus pull factors and the global financial
crisis. Journal of International Economics. 88(2). pp.341-356.
Brinkman, H.J., and et. al., 2010. High food prices and the global financial crisis have reduced
access to nutritious food and worsened nutritional status and health. The Journal of
nutrition. 140(1). pp.153S-161S.
Aloui, R., Aïssa, M.S.B. and Nguyen, D.K., 2011. Global financial crisis, extreme
interdependences, and contagion effects: The role of economic structure?. Journal of
Banking & Finance. 35(1). pp.130-141.
Online
Opinion:How the pieces are falling into place for another global financial crisis. 2017. [online].
Available Through:<http://www.marketwatch.com/story/how-the-pieces-are-falling-into-place-
for-another-global-financial-crisis-2016-07-25>. [Accessed on 9 may 2017].