The paper "Analysis of Global Financial Crises " is a perfect example of a finance and accounting assignment. A global financial crisis is not a new thing in the world of economy. The economical world crises have been brewing for some time now. The first great economic depression was experienced in the United States of America in 1929 (Volkan 2008). Since then there have been numerous global financial crises which have taken place since. These financial crises have had serious effects on the world of economy and more especially on the banking industry.
Many financial and non-financial institutions such as insurance companies have collapsed since they have failed to match the prevailing economic challenges. The governments even from the wealthiest nations have been challenged to come up with different packages to salvage their economies (Adalet 2004). On the other hand, many citizens from various countries are so much concerned with those have the responsibility to formulate policies on financial matters that they think have failed to perform their duties. The majority of the world residents are actually worried about what will happen if the global financial crises persist.
This is because the majorities are aware of the likely consequences that these crises are likely to bring upon their lives and they can influence their livelihood. The impact of the global melt-down is likely to affect every individual irrespective of the economic region one is operating. This is because the global economy is highly interconnected. However, some of the effects related to economic crises could be easily avoided if all the ideologues and concerns and stakeholders are taken into consideration while addressing issues related to financial issues (Volkan 2008).
The intention f this essay is to address the issue of global financial addressing by focusing on the most recent financial crises in the United States, the role of financial institutions and bankers in the world economy, the areas of financial systems where the financial regulation is inadequate, the recommended changes to the financial regulatory system, internationally and domestically and the ways in which they will help remove the gap that exists between different financial systems in addressing financial issues. Provide an analytical description of one or more financial crises that have occurred in the world’ s economy Currently, the United States and many European countries are in very serious financial crises.
In many a time, several demonstrations have been witnessed in the united states near the financial centre close to the famous Wall Street, the reason for this being the demand to have the government several changes to the country’ s financial systems and at the same time amend those that do not take into account the people’ s needs but only benefit the banks. A financial crisis is not a new thing in the United States.
The country first had a financial crisis in 1929, during the great depression when the country’ s economy suffered a major setback. During the earlier 1980s, like many other world countries, the country also experienced a major crisis that affected many economies following great inflation (Bardhan 2008). Currently, the country is experiencing a major setback from the world economic downturn. The current financial crisis has seen many banks run bankruptcy including the biggest and most trusted banks. This is because of the market volatility that many of the banks are experiencing.
The financial crisis that is currently facing America and many of the European countries is directly related to the financial crisis that is facing Greek. This follows the country’ s submission to the International Monetary Fund (IMF) and social unrest. The resultant of the current state is what many merging countries such as India cannot run away from. Globalization has been attributed as the major contributor to the financial crisis that the world is facing currently (IMF 2012). This is because at every minute trillions of dollars are transferred unregulated.
This also follows the high level of gambling on the future of the financial markets. Given the fact, the fact that America is one of the strongest economies in the world, its financial foundations have been laid on the fragile ground where several banks have gone a step further to borrow large amounts of money that they cannot be able to repay. This can be likened to the case of the sub-prime where individuals who cannot afford to pay loans are given money to buy houses.
According to Occupy Wall Street, the situation that America is facing currently is attributed to the massive resources that have been used by the country in war. Many of the citizens believe that the economy would not be as bad as it's now if it were not for the wars both in Iraq and Afghanistan which the federal government engaged in. even though the Occupy Wall Street team has continued to blame the Wall Street on the current challenges the country is facing, the majority of the American citizens believe that the federal government is primarily responsible for country’ s problems.
The country’ s problem started in 2008 during the sub-prime crisis. To add to the country’ s financial crisis is the current financial debt crisis that is facing the European countries. This not only spells financial doom for European countries but also the United States according to Dipak (2011).
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