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Are the European banks riskier than the US competitors for the period 2002-2007? yang
Finance & Accounting
Pages 5 (1255 words)
Are the European banks riskier than the US competitors for the period 2002-2007? Table of Contents Abstract 3 Introduction 3 Literature Review 4 Financial crisis of US bank 4 Global European banks and financial crisis: Comparison with US banks 5 Data and methodology 7 Results and discussion 7 Conclusion 8 References 9 9 Abstract The world economy was hit by a severe financial crisis which resulted in the worst global economic downturn for over 60 years.
The crisis was caused due to the failure of many banking sector across the world. The firms which had failed in UK allowed their businesses to overextend through risk taking and excessive leverage, over dependence on risky product streams like derivatives or buy-to-let mortgages, poor decisions of management in respect of acquisitions, over reliance on wholesale funding. The project describes the position of European banks and its US competitors during the period of global financial crisis and which banks were more riskier during that time. Introduction Unprecedented innovation and growth have been seen in the financial sector over the past two decades as new products and higher returns have been sought by the investors in the era of low interest rates. Banks also had an obligation to understand the risks to which they are exposed. The complexity of certain financial instruments and the interconnected developed global market often did not provide well understanding of the dangers involved with the banks, its investors and boards, central banks and regulators (HM Treasury, 2009). ...
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