The Effect That the Financial Crisis Has Had on the Global Economy.
The effect that the financial crisis has had on the global economy.
Financial crises ?
Due to lack of liquidity in the financial institution causes recession or depression in the economy. The situation occurs in which the value of financial assets or institutions drops promptly. Financial crises always concord with a panic or run n the banks, in this situation investors sells off their all assets keeping in mind that their values will go down and they also withdraw money from their saving accounts.
There are many ways for the cause of financial crises such as it can be caused by negative economic news. natural disasters or some other significant financial impact. This cause contraction in business activities leading to a self-reinforcing and boost of the crises.
What caused the global financial crises in US? | |
U.S economy was experiencing the worst crises since the great depression. This all started from the home mortgage, this market is called "subprime" mortgages, this is now beyond subprime to prime mortgages, corporate junk bonds, real estate and some other forms of debts. Total one-third of the bank capital was lost by the U.S banks. This crises led to sharp reduction in bank lending and causing severe recession in the U.S . economy.
The global financial crises sounds like it hasn 't affected the regular people, but the regular workers in the massive companies have been bankrupted and also became unemployed . Major cities and the towns in the Unites States are been decimated due to large employer in the area has gone out of business.
There are various factor which generally points the reasons that trigged the global financial crises.
One of the main factor behind the crises is mortgage derivative products. Risky mortgage were packed properly and sold to the investors and other banks as secure investment products. This packaging was gradually grew as lending criteria in the first five or six years of the twenty first century.
Financial crises ?
Due to lack of liquidity in the financial institution causes recession or depression in the economy. The situation occurs in which the value of financial assets or institutions drops promptly. Financial crises always concord with a panic or run n the banks, in this situation investors sells off their all assets keeping in mind that their values will go down and they also withdraw money from their saving accounts.
There are many ways for the cause of financial crises such as it can be caused by negative economic news. natural disasters or some other significant financial impact. This cause contraction in business activities leading to a self-reinforcing and boost of the crises.
What caused the global financial crises in US? | |
U.S economy was experiencing the worst crises since the great depression. This all started from the home mortgage, this market is called "subprime" mortgages, this is now beyond subprime to prime mortgages, corporate junk bonds, real estate and some other forms of debts. Total one-third of the bank capital was lost by the U.S banks. This crises led to sharp reduction in bank lending and causing severe recession in the U.S . economy.
The global financial crises sounds like it hasn 't affected the regular people, but the regular workers in the massive companies have been bankrupted and also became unemployed . Major cities and the towns in the Unites States are been decimated due to large employer in the area has gone out of business.
There are various factor which generally points the reasons that trigged the global financial crises.
One of the main factor behind the crises is mortgage derivative products. Risky mortgage were packed properly and sold to the investors and other banks as secure investment products. This packaging was gradually grew as lending criteria in the first five or six years of the twenty first century.
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