StudentShare solutions
Triangle menu

Interest rate convergence / Covered or uncovered interest rate parity - Dissertation Example

Not dowloaded yet

Extract of sample
Interest rate convergence / Covered or uncovered interest rate parity

made significant losses on acquisitions of foreign institutions and on holding of asset-based securities (OECD, 2009, p.30). By mid 2007, the financial disorder with its rigorous liquidity and credit crunch seemed to detain to financial markets and institutions in the U.S., U.K., Western Europe, Asia and many other countries. It resulted in the failure of key businesses, downturn in the economic activity and decline in the consumer wealth. During this period economies globally slowed, as international trade declined and credit tightened. This paper will focus on the effect of financial crisis on U.K. and other developed nations like USA, Europe and Asia and will also compare the impact of crisis on U.K. with these nations. Table of Contents Abstract 2 Table of Contents 2 Introduction 4 Chapter 1 6 Impact of the Financial Crisis 6 United Kingdom 6 United States of America 7 Europe 8 Asia 9 Comparison 10 Chapter 2 10 Steps towards Recovery 10 United Kingdom 10 United States of America 11 Europe 12 Asia 13 Chapter 3 14 Interest Rate Convergence 14 Conclusion 15 Reference 16 Bibliography 19 Appendices 20 Reflective Essay 24 Question 25 Introduction The economy of United Kingdom and average household incomes, after 1992, has experienced a period of continuous growth. But in 2008, like many OECD economies, U.K. has also experienced a rigorous recession as a result of a sequence of global shocks which has resulted in the fall of gross domestic product (GDP) growth by -2.4% (See Appendix A). The financial crisis has rigorously weakened the supply of credit and house prices have also fallen to a great extent. It also resulted to an increase of unemployment. The increase in the government deficit has provided support to but led to an increase of debt to GDP ratio (See Appendix B) (OECD, 2009, p.21). The financial crisis has initially started in the USA and resulted in the bursting of housing bubble and the following of subprime mortgage crisis in the USA. Investment houses, banks and customers suffered huge amount of leveraged debt. In world markets, investors deployed hot money seeing higher rate of return. It has also affected the stock market of the USA (Nanto, 2009, p.32). In the plunge of 2008, Eastern Europe (EU) was also considered as the one of the most inflamed region in the world economy. It has also resulted in the large decline in output in 2009. The country that was affected most by the crisis in Eastern Europe was Latvia. The three main crisis countries i.e. Latvia, Romania and Hungary together resulted for only 2% of EU GDP. The major impact of the financial crisis was on the European banking system. Before the start of this crisis only, the financial alarm had been ringing since 2006 due to the huge current account deficit in many of these countries (Aslund, 2010, p.1). Asia is also affected by the financial crisis and resulted in a considerable drop in growth due to the sharp reduction in exports. In spite of the actions taken in response to the lessons drawn from recurring crises which have took place in 1997-98, more or less all Asian developing emerging economies now evident to increased propensity to financial boom–bust cycles and turn in property, equity and currency markets due to their closer integration with major financial centers (Akyuz, 2010, pp.1-2). Financial Services Authority ...Show more


Dissertation, Finance and Accounting Abstract The enduring global financial crisis has led to a sharp reduction of international trade, involving a short term decrease in global agriculture trade value around 20%. The crisis is leading to a rearrangement of exchange rates, and the definitive declaration of the crisis depends on the alteration in the exchange value of the U.S…
Author : kelli13
Interest rate convergence / Covered or uncovered interest rate parity essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the dissertation on your topic
"Interest rate convergence / Covered or uncovered interest rate parity"
with a personal 20% discount.
Grab the best paper

Related Essays

Company's interest regarding private equity buyouts
In just one generation the private equity industry has grew to become a dynamo for growth, innovation and enterprise (Kolade. W, 2008). Britain is a world leader in this sector with one of the largest private equity markets globally, second only to the US.
50 pages (12500 words) Dissertation
Effect of corporal punishment on later delinquency rate
The purpose of this paper is to find out what changes take place in an individual psychologically, emotionally and mentally when corporal punishment is used to modify behavior. These three aspects are often interlinked. When punishment is inflicted a child exhibit many emotions such as fear, distress sense of helplessness but most important of all is shame and humiliation that is suffered.
9 pages (2250 words) Dissertation
Interest groups
40 pages (10000 words) Dissertation
Effect of interest rate and inflation rate on the islamic shares listed in the united arab emirates
The Development and Growth of Islamic Shares Investment in the UAE 25 Fundamental Analysis 25 Development of UAE Economy through Direct foreign investment 27 Background of NASDAQ Dubai Stock Exchange 28 Analysis of the Data and Variables 29 CHAPTER 6: CONCLUSION 36 Bibliography 37 Abstract and Executive Summary The Islamic economic system has always implemented such principles that safeguards the rights of the investors in the economy and create an environment of utmost harmony in the economy.
60 pages (15000 words) Dissertation
Affects of Interest Rates on Consumption in the UK
Abstract The present scenario in the UK economy with respect to the pattern of consumption in the retail sector has evolved as a matter of concern. Interest rate is an important tool of monetary policy for controlling the unusual movements in the economy.
65 pages (16250 words) Dissertation
Graduation Rate in WV and Principal's Leadership
As leader of his school, he influences the teachers and students alike to bring out the best in them. As a visionary, he introduces new policies to improve the student performance. He empowers teachers to practice new techniques to enhance students’ achievements.
20 pages (5000 words) Dissertation
The Effect of interest rate Liberalization on the risk of commercial banks in China
China finally opted for interest rate liberalization in the year 2004, around thirty-six years after the reform process under Deng had started.
60 pages (15000 words) Dissertation
Impact of foreign exchange rate on stock returns
Basically, if the ADF statistic exceeds the critical value in each of the tests, then the null hypothesis of the unit root cannot be accepted. On the other hand, if the test statistic does not exceed the critical value, then the null hypothesis is accepted and the series is then said to be non-stationary (Dickey and Fuller, 1981).
13 pages (3250 words) Dissertation
Organizational Conflicts of Interest In Contracts Management
Individuals and organizations are involved in different conflicts of interests that affect their decision making process on how they will respond to certain tasks. In this paper I am going to look into how organizations are involved in conflict of interests in the contract management process and how to resolve these conflicts in contract management process using the organization conflict of interest regulations (OCI).
6 pages (1500 words) Dissertation
The Increasing Scientific Interest on the Importance of Human Sleep
One of this is the mechanism of sleeping which includes the different parameters measured in the human body specifically in the circulatory and the nervous system. Also included are the stages of sleep from light or synchronized sleep to deep or deep sleep. The results of different researchers related to sleep as well as the importance in the health.
22 pages (5000 words) Dissertation
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation