The Financial Crisis Of 2008 - 2083 Words

Ever since the economic virus called â€Å"negative interest rates† scattered over European and later Japanese banks, our economic system has been the most unstable since the financial crisis of 2008. The virus, negative interest rates, is a concept in which the central bank charges interest in borrowing money and holding an account. It was brought forth in efforts to increase economic growth by giving commercial banks a tax on the large amount of reserves they hold in the bank. In other words, commercial banks’ negative charge results in the commercial banks having to pay to keep their money at the central bank. Numerous economists scratch their heads in confusion, but from the perspective of a developing economy this technique looks like the best alternative. It brings up the question why set interest rates negative? Maybe since it encourages foreign investors to favor the domestic currency since it causes the currency to appreciation. Or since it makes it harder for funding of criminal activities since one of the common method of transaction will cease to exist. Needless to say, in theory, negative interest rates are intended to simulate the economy by increasing lending by the banks requiring them to borrow more money. The reason why several central banks have converted to this inconvenient method is considering negative interest rates create easy money, causing a short term economic growth. However, in practice, it seems as a desperate attempt to fix the economy in not theShow MoreRelatedThe Financial Crisis Of 20081384 Words   |  6 PagesThe turmoil in the financial markets also know n as the financial crisis of 2008 was considered the worst financial crisis since the Great Depression. Many areas of the United States suffered. The housing market plummeted and as a result of that, many evictions occurred, as well as foreclosures and unemployment. Leading up to the financial crash, most of the money that was made by investors was based on people speculating on investments like real estate, stocks, debt buying, and complex investmentRead MoreThe Financial Crisis Of 20081747 Words   |  7 PagesThe economic crisis of 2008 was one for the ages, it changed the world of investing forever. That year, the stock market crashed, bank failures and the infamous wall street bailout that can all be traced back to the subprime mortgage crisis.. The 2008 economic crisis rocked the global economy for the worst, and to this day the United States is trying to recover from the impact that the crisis had. In order to understand why exactly the banks failed people have to understand the subprime mortgageRead MoreThe Financial Crisis Of 20081817 Words   |  8 PagesThe financial crisis of 2008 did not arise by chance. The meltdown was precipitated by systematic striping away of the New Deal era policies of bank regulation. Most notable of these deregulatory acts was that of the Gramm-Leach-Bliley Act of 1999. This bill repealed the legislation which held commercial banks and investment banks separate. As the beginning of the 21 century approached many bankers clamored for an end to the policy of the â€Å"firewall† between Investment and commercial banks. Gramm-Leach-BlileyRead MoreFinancial Crisis 20085972 Words   |  24 PagesCORPORATE FINANCE THE GLOBAL FINANCIAL CRISIS 2008 Group’s member:Nguyá »â€¦n NhÆ ° Nam (C)Phan Thu AnNguyá »â€¦n Thà ¹y DungHoà  ng Bà ¡ SÆ ¡nNgà ´ Thá »â€¹ à nh Tuyá º ¿tDate: 28/11/2014 | AbstractIn 2008 the world was fell into the worst financial crisis since the Great Depression of 1929-1933. Although this crisis has gone, however, its consequences for the economy of many countries is very serious, even now many nations are still struggling to escape difficulty. Just in a short period, the crisis originating from AmericaRead MoreThe Financial Crisis Of 2008 Essay2044 Words   |  9 PagesThe 2008 financial meltdown resulted in the most treacherous investment landscape observed since the great depression. The most notorious issue was the subprime mortgage crisis, which had a ripple effect felt through every market in the world. The banks, whose leverage rate should never have been higher than two times capitalization, surged as high as thirty to forty times market cap. With this level of exposure, any unforeseen market fluctuations could mean disaster. Lehman Brothers, the oldestRead MoreThe Financial Crisis Of 20081125 Words   |  5 PagesA mortgage meltdown and financial crisis of unbelievable magnitude was brewing and very few people, including politicians, the media, and the poor unsuspecting mortgage borrowers anticipated the ramifications that were about to occur. The financial crisis of 2008 was the worst financial crisis since the Great Depression; ultimately coalescing into the largest bankruptcies in world history--approximately 30 million people lost their jobs, trillions of dollars in wealth diminished, and millions ofRead MoreThe Financial Crisis Of 20081689 Words   |  7 PagesOur society seems to doing well since the financial crisis of 2008. The country is recovering from the Great Recession, unemployment is down and the global domestic product is up. People have jobs and are paying taxes. President Obama lowered our budget deficit and promised to make healthcare more available to all. On average, America is well on its way to recovery. But what about the people that slipped through the cracks of the financial stimulus pl an? These are the people that lost their jobsRead MoreThe Financial Crisis Of 2008 Essay2553 Words   |  11 PagesWhen you think of the 2008 financial crisis that affected not just the US economy, but the world as a whole, most average middle-class Americans won’t really know what triggered this economic disaster. Most will probably blame, and rightfully so, those large corporations on Wall Street. These corporations, which deal with insanely large amounts of money, will always be wary of their stocks decreasing. But they also know that 99% of the time, everything will go back to normal in the future. What theyRead MoreFinancial Crisis of 20081794 Words   |  8 PagesThe Financial Crisis of 2008 was the worst financial crisis since the Great Depression, however a lot of American’s want tougher law of be enforced against executives and companies they think started the mess (Jost/Misconduct). Civil charges have been brought up against major banks for misleading inves tors, but a federal judge rejected a proposed settlement saying it was too lenient (Jost/Misconduct). The flood of subprime mortgages roiling the housing market in the U.S. is also causing the worldwideRead MoreThe Financial Crisis Of 20081946 Words   |  8 PagesThe world before the financial crisis of 2008 had stability. Iceland in 2000 was viewed as the perfect place to live and have your family grow. Iceland had clean energy, high standard of living, jobs, and low government debt. Iceland was a place were children played and parents laughed and enjoyed their life. Everyone lived well; Iceland was the role model of finance, until it all melted away. Iceland let giant corporations come into its territory and exploit its geothermal and hydroelectric resources