2008 Financial Crisis Research Paper
Introduction:
The economic and financial crisis from 2008 to 2009, also known as the global financial crisis, was considered to be the worst financial crisis since the Great Depression. The general situation at financial markets has been additionally complicated by introduction of new financial products and another mode of operations including globalization. Global financial markets seem to be playing different function in economy and it has been working due to new regulations. Introduction of new trade platforms, online access to information, integration and globalization of the market caused some revisions of finance theories. What are reliable predictors of economic and financial crisis? Describe some achievements and pending issues in …show more content…
With nine thousand banks deteriorating succeeding the stock market crash, this was the worst financial crisis to date. With the Obama administration inheriting the second worst financial crisis, his first term, which began in 2008, was quite a trouble. Reversing the worst crisis, President Obama could have fell on, it was evident his first term would be nowhere easy. With increasing globalization and financial integration, capital account problems could make a country highly vulnerable to shocks. Manifestations of capital account problems could include declining foreign reserves, excessive short-term foreign debt, debt maturity and currency mismatches, and capital flight. (Lead indicators of a financial crisis). The financial crisis that erupted in the wake of the collapse of Lehman Brothers in 2008 led to a reconsideration of earlier policy approaches based on the self-regulating ability of markets. In particular, the role of anti-cyclical macroeconomic policies in sustaining the economy and jobs was widely acknowledged (IMF, 2009). In addition, unlike in earlier crises, social protection was reinforced and in particular the level and duration of unemployment benefits were improved – thereby departing from the view that higher benefits automatically aggravate market distortions (Howell,
The economic and financial crisis from 2008 to 2009, also known as the global financial crisis, was considered to be the worst financial crisis since the Great Depression. The general situation at financial markets has been additionally complicated by introduction of new financial products and another mode of operations including globalization. Global financial markets seem to be playing different function in economy and it has been working due to new regulations. Introduction of new trade platforms, online access to information, integration and globalization of the market caused some revisions of finance theories. What are reliable predictors of economic and financial crisis? Describe some achievements and pending issues in …show more content…
With nine thousand banks deteriorating succeeding the stock market crash, this was the worst financial crisis to date. With the Obama administration inheriting the second worst financial crisis, his first term, which began in 2008, was quite a trouble. Reversing the worst crisis, President Obama could have fell on, it was evident his first term would be nowhere easy. With increasing globalization and financial integration, capital account problems could make a country highly vulnerable to shocks. Manifestations of capital account problems could include declining foreign reserves, excessive short-term foreign debt, debt maturity and currency mismatches, and capital flight. (Lead indicators of a financial crisis). The financial crisis that erupted in the wake of the collapse of Lehman Brothers in 2008 led to a reconsideration of earlier policy approaches based on the self-regulating ability of markets. In particular, the role of anti-cyclical macroeconomic policies in sustaining the economy and jobs was widely acknowledged (IMF, 2009). In addition, unlike in earlier crises, social protection was reinforced and in particular the level and duration of unemployment benefits were improved – thereby departing from the view that higher benefits automatically aggravate market distortions (Howell,