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Financial Crisis PowerPoint Presentation Slides
The document details the impact of the 2008 financial crisis, highlighting key statistics such as a 31.8% drop in housing prices and a federal bailout of $182 billion for AIG. It discusses the role of subprime mortgages, credit default swaps, and the resulting bank failures, culminating in the bankruptcy of Lehman Brothers. The aftermath includes significant bailouts by the federal government and ongoing concerns about the banking sector's concentration and regulatory changes.
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Financial Crisis PowerPoint Presentation Slides
- 1. Financial Crisis Yo u rC o m p a n y N a m e
- 2. 2008 Financial CrisesImpact Explained In Numbers Option (1/2) 2 Housing Prices fell 31.8% Unemployment was still 9% in 2010 $30 Bn federal guarantee for deal between JP Morgan Chase & Bear Stearns Federal bailout for AIG $182 Bn & ..guarantee 90% of all mortgages Treasury department spent $439.6 Bn buying bank & car stocks $144.5 Bn moved from money market to treasury bonds Source: The Balance 2019
- 3. 2008 Financial CrisesImpact Explained In Numbers Option (2/2) 3 Housing Prices fell 31.8% $30 Bn federal guarantee for deal between JP Morgan Chase & Bear Stearns Fannie Mae & Freddie Mac guarantee 90% of all mortgages $144.5 Bn moved from money market to treasury bonds Unemployment was still above 9% in 2010 $182 Bn federal bailout for AIG Treasury department spent $439.6 Bn buying bank & car stocks Source: The Balance 2019
- 4. Major Financial BubbleBurst of all Times 4 Dow Jones Industrial Average Losses neared 90% by 1932 Precious Metal Silver fell 66% in 2 months Nikkei 225 20-year bear market, losses hit 82% NASADQ & the Internet boom Fell 30% 1 month after record high US Housing Market Homebuilding stocks lost 90%in value Crude Oil Dropped 77% in 6 months Precious Metals Silver fell 25% in 5 Days 1929 1980 1989 2000 2005 2008 2011 2017 This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Bitcoin Loss of 25% in just 1 day
- 5. Impact of theGreat Recession on Investment Banks 5 Note: 1Bank of America acquired Merrill Lynch in September 2008; 2Lehman filed for bankruptcy and sold it’s investment banking business to Barclays & Nomura Rank in 2007 Investment Bank Rank in 2018 1 Goldman Sachs 2 2 Deutsche Bank 6 3 Morgan Stanley 4 4 Citi 2 5 JP Morgan 1 6 Credit Suisse 7 7 UBS 10 7 Merrill Lynch1 NA 7 Lehman Brothers2 NA 10 Barclays 7
- 6. 2008 Financial CrisesCost 6 Total U$$ 1,488B APRA Tax Cuts & Spending U$$ 831B TARP Bank Bailout U$$ 440B Bear Stearns Bailout U$$ 30B Fannie & Freddie Bailout U$$ 187B
- 7. Hank Paulson TimothyGeithner John Thain Ben Bernanke Jamie Dimon Richard Fuld Then: US Treasury Secretary Now: Chairman of Paulson institute, a think tank he set up at the University of Chicago in 2011 Then: Chairman, Federal Reserve Now: Senior advisor to Citadel, a hedge fund Then: President, Federal Reserve bank of New York, and later, treasury secretary Now: President Warburg Pincus Then: Chairman & CEO, JP Morgan Chase & Co Now: Same Then: Chairman & CEO, Merrill Lynch Now: Member of Supervisory board, Deutsche bank AG Then: Chairman & CEO, Lehman Brothers Holdings Now: Founder, Chairman & CEO Matrix Investment Management Key Figures of the Crises 7
- 8. Although the U.S.economy nicely withstood terrorist attacks, the bust of the dot-com bubble and accounting scandals, the fear of recession was the top concern for everyone To keep recession away, the Federal Reserve lowered the Federal funds rate 11 times - from 6.5% in May 2000 to 1.75% in December 2001 - creating enormous liquidity in the economy To make things merrier, in October 2004, SEC relaxed the net capital requirement for five investment banks - Goldman Sachs, Merrill Lynch, Lehman Brothers, Bear Stearns and Morgan Stanley - which freed them to leverage up to 30-times or even 40-times their initial investment This easy and excess money found its prey in restless bankers and borrowers with little or no income; also referred as Subprime borrowers (Explained in Appendix) These subprime borrowers wanted to realize their life's dream of acquiring a home More home loans, more home buyers, more appreciation in home prices It wasn't long before things started to move just as the cheap money wanted them to Before the Beginning 8 This slide is 100% editable. Adapt it to your needs and capture your audience's attention. In 2001, the U.S. economy underwent a minor, short-lived recession
- 9. What Happened then? 9 Thisenvironment of easy credit and the upward spiral of home prices made investments in higher yielding subprime mortgages look like a new rush for gold This environment of easy credit and the upward spiral of home prices made investments in higher yielding subprime mortgages look like a new rush for gold Even this wasn’t enough, what was going to happen next worsened the situation The mortgage lenders wanted more money to lend to homebuyers, so they sold their existing loans to banks and to Freddie Mac and Fannie May, which in turn sold these to investment banks This slide is 100% editable. Adapt it to your needs and capture your audience's attention.
- 10. How did itSpread? 10 The investment banks combined these loans with hundreds of others into what are known as collateralised debt obligations (CDOs) (Explained in Appendix) and sold these to investors worldwide as mortgage-backed securities (MBS) The returns depended on monthly payments on the loans CDO issuance hit $634 billion in 2007 Credit Rating agencies called these sound investments, when they were not. No surprise there, as the investment banks were their clients
- 11. How did thosewho Bought CDO Protect themselves? 11 Insurance companies used these instruments to cover investors’ losses if homebuyers defaulted on loans A traditional insurance company known as the American International Group (AIG) sold these swaps. When the derivatives lost value, AIG didn't have enough cash flow to honor all the swaps They thought an insurance product called credit default swaps protected them No one expected the party to wind down and so there were no worries This is where another infamous term from the crisis comes in: credit default swaps
- 12. Beginning of theEnd 12 Housing prices started falling in 2006 and homebuyers began defaulting on their loans, which meant insurance companies couldn’t honour all their credit default swaps Within a few weeks in September 2008, Lehman Brothers, one of the world’s biggest financial institutions, went bankrupt £90bn was wiped off the value of Britain’s biggest companies in a single day Banks panicked when they realized they would have to absorb the losses. They stopped lending to each other. They didn't want other banks giving them worthless mortgages as collateral As a result, interbank borrowing costs, LIBOR, rose. This mistrust within the banking community was the primary cause of the 2008 financial crisis The Federal Reserve began pumping liquidity into the banking system via the Term Auction Facility. But that wasn't enough
- 13. Subprime Effect 13 This graph/chartis linked to excel, and changes automatically based on data. Just left click on it and select “Edit Data”. UK Netherlands Germany France Belgium USA China Australia Sub-Prime Effect
- 14. Major Bailout Packages 14 BearStearns approached JP Morgan Chase to bail it out The Fed had to sweeten the deal with a $30 billion guarantee. By 2012, the Fed had received full payment for its loan The Fed loaned $85 billion to AIG as a bailout. Later, the Fed and Treasury restructured the bailout and total cost ballooned to $182 billion. But by 2012, the government made a $22.7 billion profit TARP (Troubled Asset Relief Fund) disbursed $442.6 Bn to banks for bailout This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Treasury Secretary took over mortgage companies Fannie Mae and Freddie Mac costing $187 billion at the time. Since then, Treasury has made enough in profits to pay off the cost
- 15. Banks have PaidBillions of Dollars in Fine 15 56% 38% 6% Sales North American Regulators European Regulators Consumers Recipients of Penalties Source: Boston Consulting Group; Thomson Reuters Penalties paid by banks between 2009 & 2016 is $321 Bn North American Banks 63% European Banks 37%
- 16. After a Decade– Current Scenario 16 While the world economy has recovered from the crisis and the Dow Jones Industrial Average has risen nearly four times since its 12-year low in March 2009, big worries remain: Top 10 commercial banks still account for more than half of the assets held by 100 largest commercial banks, similar to a decade ago S&P, Fitch and Moody’s are still dominant players, earning more than $9 out of every $10 in the credit-rating industry Some complex derivative instruments vilified during the crisis are back in demand. For instance, synthetic CDOs, which invest in CDSs, were expected to quadruple to $100 bn in 2017 from 2015 US President Donald Trump wants to dismantle the Dodd-Frank Wall Street Reform and Consumer Protection Act, a key law passed in 2010 to tighten financial regulation in the aftermath of the crisis This slide is 100% editable. Adapt it to your needs and capture your audience's attention.
- 17. Fed Tapering 17 Tapering isthe gradual reversal of a quantitative easing policy implemented by a central bank to stimulate economic growth Tapering came to the picture in 2013 when, then Fed chairman, Ben Bernanke commented that the Federal Reserve would Tapering prematurely can lead to a recession while delaying it could lead to an unwelcome rise in inflation Tapering refers to the reduction, not the elimination, of Fed asset purchases This slide is 100% editable. Adapt it to your needs and capture your audience's attention.
- 18. Quantitative Easing 18 Quantitative easingis an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to lower interest rates and increase the money supply Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity Quantitative easing is considered when short-term interest rates are at or approaching zero, and does not involve the printing of new banknotes ….which should lower short-term interest rates & increase the capital available to institutions to promote increased lending and liquidity A central bank can implement quantitative easing by purchasing government bonds from commercial banks and other private institutions,
- 19. Financial Crisis IconsSlide 19
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- 21. Our Mission 21 This slideis 100% editable. Adapt it to your needs and capture your audience's attention. Vision This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Mission This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Goal
- 22. Name Here NameHere Name Here Designation This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Designation This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Designation This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Our Team 22
- 23. Comparison 23 This slide is100% editable. Adapt it to your needs and capture your audience's attention. 75% This slide is 100% editable. Adapt it to your needs and capture your audience's attention. 85 % Laptop Users Mobile Users
- 24. Our Target 24 Target 01 Thisslide is 100% editable. Adapt it to your needs and capture your audience's attention. Target 02 This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Target 03 This slide is 100% editable. Adapt it to your needs and capture your audience's attention.
- 25. Financial 25 This slide is100% editable. Adapt it to your needs and capture your audience's attention. Minimum 50% This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Medium 75% This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Maximum 95%
- 26. 30 60 90Days 30 Days Plan ▪ This slide is 100% editable. Adapt it to your needs and capture your audience's attention. ▪ This slide is 100% editable. Adapt it to your needs and capture your audience's attention. ▪ This slide is 100% editable. Adapt it to your needs and capture your audience's attention. ▪ This slide is 100% editable. Adapt it to your needs and capture your audience's attention. ▪ This slide is 100% editable. Adapt it to your needs and capture your audience's attention. ▪ This slide is 100% editable. Adapt it to your needs and capture your audience's attention. 60 Days Plan ▪ This slide is 100% editable. Adapt it to your needs and capture your audience's attention. ▪ This slide is 100% editable. Adapt it to your needs and capture your audience's attention. ▪ This slide is 100% editable. Adapt it to your needs and capture your audience's attention. 90 Days Plan 26
- 27. Timeline 27 2013 2014 2015 2016 2017 2018 2019 2020 This slide is100% editable. Adapt it to your needs and capture your audience's attention. This slide is 100% editable. Adapt it to your needs and capture your audience's attention. This slide is 100% editable. Adapt it to your needs and capture your audience's attention. This slide is 100% editable. Adapt it to your needs and capture your audience's attention. This slide is 100% editable. Adapt it to your needs and capture your audience's attention. This slide is 100% editable. Adapt it to your needs and capture your audience's attention. This slide is 100% editable. Adapt it to your needs and capture your audience's attention. This slide is 100% editable. Adapt it to your needs and capture your audience's attention. Start End
- 28. Thanks for Watching! 28 ContactNumber 0123456789 Address # street number, city, state Email Address emailaddress123@gmail.com