FSAs Role towards the Collapse of Global Financial Services Industry

FSAs Role towards the Collapse of Global Financial Services Industry Essay example
Masters
Essay
Finance & Accounting
Pages 8 (2008 words)
Download 0
The collapse of the global financial services industry in 2007 is also known as global financial crisis. By mid 2007, the financial disorder with its rigorous liquidity and credit crunch seemed to detain to financial markets and institutions. …

Introduction

It resulted in the failure of the key businesses, downturn in the economic activity directing to the 2008-12 global recessions and the decline in the consumer wealth. During this period economies globally slowed, as international trade declined and credit tightened. The explanation of the financial crisis is that hasty loans in the form of mortgages were made to people who do not have any possibility of paying them back. These loans were enclosed up into exotic financial products that were specified with high ratings by credit rating agencies, and were sold to investors thus looking for high yields at low risk. When default on the mortgages began to grow in large numbers, it led to unexpected losses on the products. A chain of bankruptcies, government providing emergency credit lines, balance sheet write downs, insurance and nationalisation of several institutions followed. Investors were inattentive in their understanding of what they were actually purchasing and sub-prime borrowers were insincere in taking out loans that they should have known they could not finally meet the repayments on. The crash reveals a quick drying up of liquidity following a huge expansion in credit issued to consumers and financial institutions in a number of countries. ...
Download paper
Not exactly what you need?

Related papers

Marketing Environment of the Financial Services Industry
Modification of this law recognizes the comparative development of the DIFC and strengthens its autonomy from onshore legislators. These legislative alterations with regard to DIFC examine what can be anticipated in terms of future regulations inside UAE financial services segment. This will significantly aid in encouraging business in the area. The significant bodies of the DFIC are maintained…
Financial Services
The parties involved in the financial markets include investors, financial institutions (intermediary) and other parties that are brought together by formal trading rules and communication networks for business different financial instruments (assets and credits)(Brigham&Ehrhardt2010). Difference types of financial markets Financial market are classified depending on the types of securities that…
financial services
Transactions on derivative contracts occur between two parties in which a financial agreement is done whose payments depend on the value of the underlying assets and securities. Derivative contracts are broadly categorized into lock and option products. Lock category derivative contracts bind the two parties into an obligation of executing the contract according to the terms and conditions over…
IT & Financial Services
For this, the needs of financial transactions arise on a regular basis. In these days information technology is the biggest invention that contributes to the welfare of humanity. It not only speeds up the mode of everyday life but also makes life easier. “Time” is the most precious element in today’s life. The value of time is the biggest concern for everyone. Digitalization and introduction…
financial services accessibility
This paper shall mostly be a discussion of the relationship between people and finance, in terms of governments’ failures in managing the country’s wealth. In general, this essay shall be founded on the assumption that access to financial services is a development opportunity to many people when the government is unable or does not provide support to communities. This essay shall discuss the…
ETHICS AND FINANCIAL SERVICES
After conducting a financial analysis, it was evident that the company had overstated its revenues in the year 1997 and 1998. During this era, some of its techniques were quite confusing and blatant. The company had excluded some of its expenses from its financial book. The case highlights various red flags such as an extreme growth-oriented management team and growing need for extra capital. With…