FSAs Role towards the Collapse of Global Financial Services Industry - Essay Example

Only on StudentShare

Extract of sample
FSAs Role towards the Collapse of Global Financial Services Industry

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

Summary

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. …
Author : raynorjammie

Related Essays

Marketing Environment of the Financial Services Industry
6 pages (1506 words) Essay
Financial Services
5 pages (1255 words) Essay
financial services
5 pages (1255 words) Essay
IT & Financial Services
8 pages (2008 words) Essay
financial services accessibility
20 pages (5020 words) Research Proposal
ETHICS AND FINANCIAL SERVICES
5 pages (1255 words) Essay
Changes in Gulf banking industry after global financial crisis
4 pages (1004 words) Research Paper
Got a tricky question? Receive an answer from students like you! Try us!