The paper 'Stakeholders and How They Are Affected by Financial Crisis" is a good example of a finance and accounting assignment. There are a number of stakeholders involved in the reported financial situation. They include banks, the UK national government, the small and large companies, individual customers in the bank, and investors. All the identified stakeholders have different experiences based on the role they played in the current financial situation (Fassin and Gosselin, 2011). Banks are experiencing a reduction of credit level and thus, reducing banks’ ability to give more loans.
This has resulted to increase in lending interest even between banks, a situation that is provoking the credit crunch. Lending to individuals with low ability to repay has resulted in the accumulation of bad debts. Their share value has decline and their ability to survive has gone down. The entire situation has resulted in a loss of trust from their customers. The large and small companies cannot manage to continue with their operation due to shortage of finances. These companies are experiencing loans recall and banks unwillingness to give more finances despite the companies' credit availability.
This has highly affected the operations of these companies. Lack of enough finances has resulted in the postponement of projects, employment of cost-cutting measures and business closure in small companies with limited financial ability after they are declared bankrupt (Fassin and Gosselin, 2011). Individual customers have benefitted from the situation for they are able to own houses despite their poor financial records and lack of enough collateral. They are also able to maintain their houses after their credit is declared as bad debt. However, this has affected a number of house owners who are experiencing negative equity and thus, the inability to sell these houses.
Investors tempted to buy packaged loans in the financial market are also at risk of losing their money for most of these loans have already been listed as bad debts. The situation threatens the economy of the entire country, and in this regard, the government has been forced to intervene. The government assumes the bank's liabilities. This will result in cut in the government expenditure and increase in taxation and thus, making the citizen suffers from banks mistake.
This will also push the government into borrowing more from other countries and thus, protracting independent debt crisis. Q. 1.2 Position on Proposed Tightening of UK Banking Regulation Utilitarianism is a theory of ethics which affirms that morals foundation is the greatest happiness. Utility principle challenges that actions can only be considered right based on the joy they bring, and wrong based on how much they can destroy people's happiness. Therefore, the determinant of wrong or right is based on the consequences of the action in terms of the feeling action propagate.
The current financial crisis brought about by poor banking policies has negatively affected most stakeholders. This includes the banks who are the policymakers. Banks are experiencing the state of credit reduction and the possibility of bankruptcy. This is also affecting other enterprises that depend on banks to operate effectively (Beauchamp et al. , 2004). In their measures to curb the situation, banks are also subjecting investors into losses or business uncertainty, after presenting loan packages characterized with uncertainty into the sale. The citizens of the UK are also suffering the consequences of banks poor policies, as the government use public money to safe the situation.
The house owners are also facing negative equity and inability to sell their properties. This is a clear indication that the current policies are causing more agony to all stakeholders than joy or happiness. They are resulting in huge losses that not only affect the direct stakeholders but the entire nation. In this regard, regulation measures are necessary (Tresch, 2014).
Argandona, A., 2012. Three ethical dimensions of the financial crisis. IESE Business School-University of Navarra.
Beauchamp, T. L., Bowie, N. E. and Arnold, D. G., 2004. Ethical theory and business.
Fassin, Y. and Gosselin, D., 2011. The collapse of a European bank in the financial crisis: an analysis from stakeholder and ethical perspectives. Journal of business ethics, 102(2), pp. 169-191.
Greycourt, 2008. White paper no. 44 – the financial crisis and the collapse of ethical behavior. Greycourt & Co., Inc.
McCarty, R. R., 2006. Maxims in Kant's practical philosophy. Journal of the History of Philosophy, 44(1), pp.65-83.
Statman, D., 1997. Virtue ethics. Edinburgh University Press.
Tresch, R. W., 2014. Public finance: A normative theory. Academic Press.