Currency crisis Essay example
Masters
Essay
Finance & Accounting
Pages 6 (1506 words)
Download 0
CURRENCY CRISIS Name: Institution: Part One The recent appointment of Mark Carney as the next Bank of England Governor for the subsequent five years has elicited several response. This is ascribed to the fact that several people had anticipated that Paul Tucker, the deputy governor was the one going to succeed Sir Mervyn King, the outgoing governor…

Introduction

However, his academic excellence and outstanding performance in various portfolios he has held proves his critics wrong (Blackden 2012). The responsibility of salvaging the United Kingdom’s currency crisis will be his primary responsibility as the governor of the Central Bank of England. Blackden’s article in The Telegraph highlights some of the attributes that Mark Carney possess that makes him a good choice for the position. The article clearly outlines possible ways that economists think Mark Carney would use to restore Britain’s dwindling economy. In this way, it has proved and highlighted some of the theories proposed earlier by economists in their attempts to explain the causes and ways of minimizing currency crisis. Mark Carney has been portrayed to believe in closer supervision and maintenance of high capital requirements for large financial institutions (Blackden 2012). This is opposed to what Sir Mervyn King advocates. However, it is worth noting that underdevelopment of the banking sector can cause a currency crisis. This is because the central bank may focus on financing the banking sector to bail them from their financial problems at the expense of maintaining the peg (Komulainen 1999). This may bring currency instability leading to a currency crisis. ...
Download paper
Not exactly what you need?

Related papers

Treasury, Foreign Exchange and Financilization
& O’Connell 2001) Therefore the PPP of country C with respect to the US dollar is as follows: Year PPP of country C with respect to US dollar 2003 1.02 2004 1.01 2005 1.01 2006 1.02 2007 1.01 The inflation rates for country D from 2003-2007 are as follows: (Mathis, Keat & O’Connell 2001) Therefore the PPP for country D with respect to the US dollar is: Year PPP of country D with respect to the…
European Sovereign-debt Crisis
Attempts by international monetary fund (IMF) to avail 750 billion Euros to financially support countries with high debt situation did not mitigate the situation. The paper will, therefore, explore on the causes and evolution of the debt crisis, its impact on the US market, and some interventions undertaken by the US to mitigate the impact. Causes of the Crisis Many factors can be attributed to…
Financial crisis
In such a situation, the entity would face liquidity problems, have cash flow problems, and see the net worth decreasing. If it happens to a market or a bank, then there would be panic selling that further brings the prices of stocks down. There would be a run on the banks with a large number of people attempting to withdraw cash. Assets would lose their valuation. Depending on the severity of the…
Currency Exchange
Around 1967 the GBP was devalued by 14 per cent, a major economic policy decision. Since then, the Sterling, on average has either depreciated or appreciated by 14 per cent every two years. The figure below shows how the exchange rate between the Sterling and the United States dollar has performed over a 5 year period. Around the mid 2008 shows a sharp drop in the exchange rate from around 2.0 to…
Brazilian Real Currency Report
The objective of this paper is to shed some light on the key factors affecting the behavior (in terms of appreciation) of the real, and specifically to evaluate the extent to which the expanding size of Brazil’s oil sector in the economy has influenced the explanation of these events. Oil production in Brazil has been growing strongly since the turn of the millennium. A variety of energy…
Current International Debt Crisis (Greece Crisis)
The countries had fallen into a debt trap and there was problem of cash crunch and liquidity crisis in the banking sector. Thus the Euro zone faced both fiscal and monetary policy problems along with a slowdown of the economies. The main reason behind this is the common monetary policy that these countries have owning to the adoption of the Euro currency across the entire zone but different fiscal…
Finance crisis
The history was documented in various forms which later communicated with the succeeding civilisation and revealed the history. With the roll of time various means of communication were discovered and put to use by man. In the present age which is driven by technology, it provides more than one means of communication that makes communication all the more easy and dynamic in nature. Besides,…