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Academic year : 2011-12
NAME              ROLL NO.
PRIYANK DARJI     06
HARDIK NATHWANI   27
SHASHANK PAI      28
SAGAR PANCHAL     29
DHARMIK PATEL     32
KUSH SHAH         39
SIDDARTH TAWDE    46
The Indian economy is emerging as one of the strongest
economy of the world with the GDP growth of more than 8%
every year. This has given a great support for the development
of banking industry in the country. Due to globalization,
competition among the banks has drastically been increased.
As India has a substantial upper and middle class income
hence the banks have immense opportunities to increase their
market shares. The consumer being on the receiving end is in
the comfortable position but the banks trying to increase their
market share have to continuously add value for consumers in
order to increase market share and sustain their growth.
The banking sector is the most dominant sector of the financial
system in India. Significant progress has been made with respect to
the banking sector in the post liberalization period. The financial
health of the commercial banks has improved manifolds with respect
to capital adequacy.
     Though the U.S. banking sector was in recovery mode in 2010, it
still managed to reach some highs and lows. There were 157 bank
failures in the country last year, the most since 1992, according to the
Federal Deposit Insurance Corporation (FDIC). And the number of
new bank charters was at an historic low -- 11, compared with 181
three years earlier.. The U.S. is expected to end up with no less than
6,529 commercial banks and 1,128 savings institutions by the end of
this year.
Since 2007, the world has experienced a period of severe financial
stress, not seen since the time of the Great Depression. This crisis
started with the collapse of the subprime residential mortgage
market in the United States and spread to the rest of the world
through exposure to U.S. real estate assets, often in the form of
complex financial derivatives, and a collapse in global trade.

Global financial stability has been shaken and America is facing a
growing economic crisis that could make the 1930s look like
“good times.” The U.S. banking system is on the verge of disaster,
as banks have recorded over $100 billion in losses, with hundreds
of billions more forecasted.
 The subprime mortgages are subprime. In simple words,
the principle allows a person to purchase a property for a fixed
interest rate particularly low the first 2 years (e.g. 1.45%) and
then switch to a floating rate contains a risk premium (e.g. 8%).
In return, the property is mortgaged .
 The latter sold their property with a capital gain (the U.S.
housing market growing 10% per year) enabling them to repay
the loan and interest. In 2007, Beneficiaries wishing to sell their
subprime real estate at the end of second year was leading a
face down in the U.S. housing market.
Crisis Strikes


Crisis Spreads


Kings Become Beggars


 A Culture of Greed


Reckless Lending
Market instability

How did it go so bad?

The housing market declined

The credit will dried up

The economic bailout is designed to increase
 the flow of credit.
What Caused the Current
      Financial Crisis?

Preceding Factors Contributing to the
Financial Crisis


The Problem with Securitization of
Mortgages


Reasons behind the Large Scale of the Crisis


The Shock
 First, the recent crisis was concentrated in
advanced economies.
Second, while the intensity of policy
interventions.
 Third, countries used a much broader range of
policy measures compared to past episodes.
Fourth, preliminary estimates indicate that the
overall economic costs .
American crises in 2007

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American crises in 2007

  • 1.
  • 2. Academic year : 2011-12
  • 3. NAME ROLL NO. PRIYANK DARJI 06 HARDIK NATHWANI 27 SHASHANK PAI 28 SAGAR PANCHAL 29 DHARMIK PATEL 32 KUSH SHAH 39 SIDDARTH TAWDE 46
  • 4. The Indian economy is emerging as one of the strongest economy of the world with the GDP growth of more than 8% every year. This has given a great support for the development of banking industry in the country. Due to globalization, competition among the banks has drastically been increased. As India has a substantial upper and middle class income hence the banks have immense opportunities to increase their market shares. The consumer being on the receiving end is in the comfortable position but the banks trying to increase their market share have to continuously add value for consumers in order to increase market share and sustain their growth.
  • 5. The banking sector is the most dominant sector of the financial system in India. Significant progress has been made with respect to the banking sector in the post liberalization period. The financial health of the commercial banks has improved manifolds with respect to capital adequacy. Though the U.S. banking sector was in recovery mode in 2010, it still managed to reach some highs and lows. There were 157 bank failures in the country last year, the most since 1992, according to the Federal Deposit Insurance Corporation (FDIC). And the number of new bank charters was at an historic low -- 11, compared with 181 three years earlier.. The U.S. is expected to end up with no less than 6,529 commercial banks and 1,128 savings institutions by the end of this year.
  • 6. Since 2007, the world has experienced a period of severe financial stress, not seen since the time of the Great Depression. This crisis started with the collapse of the subprime residential mortgage market in the United States and spread to the rest of the world through exposure to U.S. real estate assets, often in the form of complex financial derivatives, and a collapse in global trade. Global financial stability has been shaken and America is facing a growing economic crisis that could make the 1930s look like “good times.” The U.S. banking system is on the verge of disaster, as banks have recorded over $100 billion in losses, with hundreds of billions more forecasted.
  • 7.  The subprime mortgages are subprime. In simple words, the principle allows a person to purchase a property for a fixed interest rate particularly low the first 2 years (e.g. 1.45%) and then switch to a floating rate contains a risk premium (e.g. 8%). In return, the property is mortgaged .  The latter sold their property with a capital gain (the U.S. housing market growing 10% per year) enabling them to repay the loan and interest. In 2007, Beneficiaries wishing to sell their subprime real estate at the end of second year was leading a face down in the U.S. housing market.
  • 8. Crisis Strikes Crisis Spreads Kings Become Beggars  A Culture of Greed Reckless Lending
  • 9. Market instability How did it go so bad? The housing market declined The credit will dried up The economic bailout is designed to increase the flow of credit.
  • 10. What Caused the Current Financial Crisis? Preceding Factors Contributing to the Financial Crisis The Problem with Securitization of Mortgages Reasons behind the Large Scale of the Crisis The Shock
  • 11.  First, the recent crisis was concentrated in advanced economies. Second, while the intensity of policy interventions.  Third, countries used a much broader range of policy measures compared to past episodes. Fourth, preliminary estimates indicate that the overall economic costs .