This document discusses the 2008 financial crisis and its impact on the UK. It begins by defining a financial crisis and explaining the housing bubble and subprime lending practices in the US that triggered the crisis. It then discusses the effects in the UK, including falling retail sales, rising unemployment, and GDP declining by 1.5% in the fourth quarter of 2008, officially pushing the country into recession. The document also outlines some measures taken by the UK government to stimulate the economy through recapitalizing banks, loan guarantees, and an asset protection scheme.
1. Global activity continues to ease
2. Significant slowdown in euro area
3. Trade tensions have hit export-reliant economies
4. Rate expectations pushed back as central banks make dovish statements
5. Equities sold off in May with investors switching to bonds
6. 2020 UK growth heavily dependent on Brexit settlement
7. Risks to global growth tilted to the downside
Rarely has there been more uncertainty regarding the course of the public finances over the next five years. In this note we aim to answer some of the big questions for the economy in light of the 2021 budget.
1. Global slowdown underway
2. Impact of trade tensions greater and more prolonged than expected
3. Exports, manufacturing and investment worst hit
4. Central banks have responded with rate cuts and QE
5. Monetary easing has supported equities, recovering after a sell off in August
6. Consumers remain key driver of activity
7. Slow growth to continue, risks tilted to the downside
1. Global activity continues to ease
2. Significant slowdown in euro area
3. Trade tensions have hit export-reliant economies
4. Rate expectations pushed back as central banks make dovish statements
5. Equities sold off in May with investors switching to bonds
6. 2020 UK growth heavily dependent on Brexit settlement
7. Risks to global growth tilted to the downside
Rarely has there been more uncertainty regarding the course of the public finances over the next five years. In this note we aim to answer some of the big questions for the economy in light of the 2021 budget.
1. Global slowdown underway
2. Impact of trade tensions greater and more prolonged than expected
3. Exports, manufacturing and investment worst hit
4. Central banks have responded with rate cuts and QE
5. Monetary easing has supported equities, recovering after a sell off in August
6. Consumers remain key driver of activity
7. Slow growth to continue, risks tilted to the downside
UK corporate environment - November 2019Deloitte UK
1. Macro environment - Global economy set to grow at slowest pace since 2010 this year, and remain below trend in 2020. UK growth to remain soft this year and next. Brexit and geopolitical uncertainty loom large.
2. Momentum – UK avoided recession in Q3, business investment declining, manufacturing activity soft, household spending holding up but slowing.
3. Operating costs – cost pressures due to tight labour market but may loosen as firms pull back on hiring. Commodity prices and rental values soft. Credit conditions expected to tighten.
4. Corporate stance – risk appetite near lowest level since 2008, focus on cost reduction, deleveraging and increasing cash flow.
5. Balance sheet – cash rich, credit still relatively cheap and easily available but signs of tightening, profits falling.
6. Risks – effects of Brexit and weak domestic demand, rising global geopolitical risk and protectionism also a worry for large UK corporates.
Charting the Financial Crisis: A Narrative eBookShavondaBrandon
The global financial crisis of 2007-2009 and subsequent Great Recession constituted the worst shocks to the United States economy in generations. Books have been and will be written about the housing bubble and bust, the financial panic that followed, the economic devastation that resulted, and the steps that various arms of the U.S. and foreign governments took to prevent the Great Depression 2.0. But the story can also be told graphically, as these charts aim to do.
What comes quickly into focus is that as the crisis intensified, so did the government’s response. Although the seeds of the harrowing events of 2007-2009 were sown over decades, and the U.S. government was initially slow to act, the combined efforts of the Federal Reserve, Treasury Department, and other agencies were ultimately forceful, flexible, and effective. Federal regulators greatly expanded their crisis management toolkit as the damage unfolded, moving from traditional and domestic measures to actions that were innovative and sometimes even international in reach. As panic spread, so too did their efforts broaden to quell it. In the end, the government was able to stabilize the system, re-start key financial markets, and limit the extent of the harm to the economy.
No collection of charts, even as extensive as this, can convey all the complexities and details of the crisis and the government’s interventions. But these figures capture the essential features of one of the worst episodes in American economic history and the ultimately successful, even if politically unpopular, government response.
1. Macro environment - Global growth slowing, particularly in Europe. UK growth expected to be 1.2% this year but Brexit risks loom large.
2. Momentum - business investment declining, household spending holding up on strong wage growth.
3. Operating costs – expected to rise due to tight labour market, wage growth close to a 11-year high. Commodity prices up 12.5% ytd.
4. Corporate stance – risk appetite lowest since 2008, focus on cost reduction and increasing cash flow.
5. Balance sheet – cash rich, credit cheap and easily available, pockets of debt risk in ‘cov-lite’ sectors, profits falling.
6. Risks – effects of Brexit and weak domestic demand, rising global geopolitical risk and protectionism also a worry for large UK corporates.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Global Powers of Consumer Products 2013Melih ÖZCANLI
Global Powers of Consumer Products 2013
Engaging the connected customer
by Deloitte, 2013
The opportunity for consumer products companies to manage their brands online, engage with consumers at an individual level, and drive sales through digital channels is significant. The question is how to do it well. Take a look at this year's report to see which consumer goods companies are on the Top 250 list. Then keep reading to see what approaches the industry is likely to take to engage this new, digitally empowered consumer.
Find out which companies are where on this year's Top 250 list by downloading the complete report.
Analysis Of Credit Crisis of 2008 - 2010Robert Malvin
An analysis of the credit crisis of 2008 - 2011. In depth look into key causes of the crisis, and why the Federal Reserve policies are not going to help. Analyzes the effects and implications of the monetary policy leading up to the crisis and current policy during the crisis. Reflects on the impacts of the current policies and where they might lead and offers alternative policies that would be better from the American and Global economies.
Economic and Structural Report August 2008, extract fromSwedbank
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
The major reasons for the recession that hit worldwide especially the US and Eurozone.
The subprime Crises, US housing Crisis with Facts and Figures and The Fix.
You’ll see from the reports in this edition of Market Monitor that, while there are tentative signs of
economic stabilisation, these are tempered by indicators that still advise caution for future trade.
Germany has recorded positive growth since the summer, but we still expect bank lending to
continue to decline. Spain, in contrast, records negative growth forecasts for the short- and mid-term,
but at least our indicators show that the high tide of payment defaults and insolvencies may finally
have peaked. In the UK, however, a turnaround in the rising insolvency trend is still not in sight, and
the troubled construction sector is forecast to continue to suffer into 2010. That said, the car
scrappage scheme, which started later than in many other countries, will provide some cushion for
the automotive sector in the coming six months.
Against this background, we continue to urge caution, not just when embarking on new trading
ventures, but also in trade with established customers. Essentially, businesses need to tread more
carefully in ALL their sales transactions – monitoring changes in the payment behaviour of current
customers and taking extra care in assessing the financial strength of new prospects.
In this issue…
…we feature the following markets:
United Kingdom – with a spotlight on the construction and automotive sectors
Mexico – with a spotlight on the retail and chemicals sectors
Germany
Spain
Denmark
Portugal
Czech Republic
UK corporate environment - November 2019Deloitte UK
1. Macro environment - Global economy set to grow at slowest pace since 2010 this year, and remain below trend in 2020. UK growth to remain soft this year and next. Brexit and geopolitical uncertainty loom large.
2. Momentum – UK avoided recession in Q3, business investment declining, manufacturing activity soft, household spending holding up but slowing.
3. Operating costs – cost pressures due to tight labour market but may loosen as firms pull back on hiring. Commodity prices and rental values soft. Credit conditions expected to tighten.
4. Corporate stance – risk appetite near lowest level since 2008, focus on cost reduction, deleveraging and increasing cash flow.
5. Balance sheet – cash rich, credit still relatively cheap and easily available but signs of tightening, profits falling.
6. Risks – effects of Brexit and weak domestic demand, rising global geopolitical risk and protectionism also a worry for large UK corporates.
Charting the Financial Crisis: A Narrative eBookShavondaBrandon
The global financial crisis of 2007-2009 and subsequent Great Recession constituted the worst shocks to the United States economy in generations. Books have been and will be written about the housing bubble and bust, the financial panic that followed, the economic devastation that resulted, and the steps that various arms of the U.S. and foreign governments took to prevent the Great Depression 2.0. But the story can also be told graphically, as these charts aim to do.
What comes quickly into focus is that as the crisis intensified, so did the government’s response. Although the seeds of the harrowing events of 2007-2009 were sown over decades, and the U.S. government was initially slow to act, the combined efforts of the Federal Reserve, Treasury Department, and other agencies were ultimately forceful, flexible, and effective. Federal regulators greatly expanded their crisis management toolkit as the damage unfolded, moving from traditional and domestic measures to actions that were innovative and sometimes even international in reach. As panic spread, so too did their efforts broaden to quell it. In the end, the government was able to stabilize the system, re-start key financial markets, and limit the extent of the harm to the economy.
No collection of charts, even as extensive as this, can convey all the complexities and details of the crisis and the government’s interventions. But these figures capture the essential features of one of the worst episodes in American economic history and the ultimately successful, even if politically unpopular, government response.
1. Macro environment - Global growth slowing, particularly in Europe. UK growth expected to be 1.2% this year but Brexit risks loom large.
2. Momentum - business investment declining, household spending holding up on strong wage growth.
3. Operating costs – expected to rise due to tight labour market, wage growth close to a 11-year high. Commodity prices up 12.5% ytd.
4. Corporate stance – risk appetite lowest since 2008, focus on cost reduction and increasing cash flow.
5. Balance sheet – cash rich, credit cheap and easily available, pockets of debt risk in ‘cov-lite’ sectors, profits falling.
6. Risks – effects of Brexit and weak domestic demand, rising global geopolitical risk and protectionism also a worry for large UK corporates.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Global Powers of Consumer Products 2013Melih ÖZCANLI
Global Powers of Consumer Products 2013
Engaging the connected customer
by Deloitte, 2013
The opportunity for consumer products companies to manage their brands online, engage with consumers at an individual level, and drive sales through digital channels is significant. The question is how to do it well. Take a look at this year's report to see which consumer goods companies are on the Top 250 list. Then keep reading to see what approaches the industry is likely to take to engage this new, digitally empowered consumer.
Find out which companies are where on this year's Top 250 list by downloading the complete report.
Analysis Of Credit Crisis of 2008 - 2010Robert Malvin
An analysis of the credit crisis of 2008 - 2011. In depth look into key causes of the crisis, and why the Federal Reserve policies are not going to help. Analyzes the effects and implications of the monetary policy leading up to the crisis and current policy during the crisis. Reflects on the impacts of the current policies and where they might lead and offers alternative policies that would be better from the American and Global economies.
Economic and Structural Report August 2008, extract fromSwedbank
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
The major reasons for the recession that hit worldwide especially the US and Eurozone.
The subprime Crises, US housing Crisis with Facts and Figures and The Fix.
You’ll see from the reports in this edition of Market Monitor that, while there are tentative signs of
economic stabilisation, these are tempered by indicators that still advise caution for future trade.
Germany has recorded positive growth since the summer, but we still expect bank lending to
continue to decline. Spain, in contrast, records negative growth forecasts for the short- and mid-term,
but at least our indicators show that the high tide of payment defaults and insolvencies may finally
have peaked. In the UK, however, a turnaround in the rising insolvency trend is still not in sight, and
the troubled construction sector is forecast to continue to suffer into 2010. That said, the car
scrappage scheme, which started later than in many other countries, will provide some cushion for
the automotive sector in the coming six months.
Against this background, we continue to urge caution, not just when embarking on new trading
ventures, but also in trade with established customers. Essentially, businesses need to tread more
carefully in ALL their sales transactions – monitoring changes in the payment behaviour of current
customers and taking extra care in assessing the financial strength of new prospects.
In this issue…
…we feature the following markets:
United Kingdom – with a spotlight on the construction and automotive sectors
Mexico – with a spotlight on the retail and chemicals sectors
Germany
Spain
Denmark
Portugal
Czech Republic
International Portfolio management through Stocktrak (US and foreign stocks, US and foreign bonds, futures, options, foreign-exchange-exposure hedging strategies)
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
2. Definition of 'Financial Crisis'
The Financial Crisis of 2008
is an ongoing global financial
crisis that is the worst the
world has seen since 1933
with the Great Depression.
A situation in which the value
of financial institutions or
assets drops rapidly. A
financial crisis is often
associated with a panic or a
run on the banks, in which
investors sell off assets or
withdraw money from savings
accounts with the expectation
that the value of those assets
will drop if they remain at a
financial institution.
3. Why the financial crisis of 2008 happened?
The answer is simple: the housing bubble
burst (U.S. subprime mortgage crisis)
What is subprime lending all about?
Subprime lending means giving loan to
people who may have difficulty in
maintaining the repayment schedule.
These loans are characterized by higher
interest rates, poor quality collateral, and
less favorable terms in order to
compensate for higher credit risk.
4. Lending decisions by
Financial Institution
Borrowing decisions
by individuals
Housing
Bubble
Formation
The “housing bubble burst” in 2006-07, as prices plunged (fall) downward in
the Sunbelt (U.S). Many speculators and homeowners could not meet their
payments, especially those who had "sub-prime" mortgages because their
income was too low to support the eventual monthly payments, or who had
adjustable rate mortgages where the monthly payments started small then
escalated.
5. What Were The Effects of Financial Crisis on UK
In the UK there was a large fall in retail sales, businesses already hit by falling
sales and profitability, faced increasing problems in securing bank support for
continued trading.
Several well known brands either went out of business or had to close a
substantial number of outlets.
Unemployment rose, especially in the 18-24 age groups. Falls in retail sales and
rises in unemployment mean falling taxes revenues for governments
worldwide.
In the 4th quarter of 2008 UK Gross Domestic Product (GDP)* fell by 1.5%
and the country officially entered a period of recession. The recession
continued through 2009. However signs of recovery became apparent in the
final quarter of the year, with GDP growth of just 0.3%.
At the time of their respective failures, the Northern Rock was building society
trying to act like an investment bank and Lehman Brothers was an investment
bank trying to act like a building society!
6. Course Of Slowdown
DATES DURATION REAL GDP
REDUCTION
2008 Q2
1.25 years
(5 Qtr.)
-0.2%
2008 Q3 -1.7%
2008 Q4 -2.2%
2009 Q1 -1.8%
2009 Q2 -0.3%
7. Statistical Data to Prove The Slowdown
UK annual house price rates of change
12-month percentage change
The graph above shows that UK's house price decreased sharply from 2008 to 2009 by
25% after financial crisis and moved up until the middle of 2010, and then decreae to the
average point in 2011.
8. House price changed in UK from 2008 to 2011
The figure shows the change of house price around UK between 2008 and 2011. Obviously all regions' average house
price dropped remarkably in both 2008 and 2009, even more serious, high level house bubble exacerbated Northern
Ireland's house price fell prominently. Since its average house price rose sharply before 2007 which is the fastest house
price increased and highest average price in the UK outside London and south east. Poorly, figure 6 gives the
information about Northern Ireland's house price that decreased around 35% in two years while its averge house
price became the lowest of any region in the UK.
9. Total UK Exports, Imports and GDP, 1980-2009, Million USD
It reveals that UK's unemployment rate in 2011 almost equal to the figure in 1992's recession.
Some economists are suggesting the government to deal with this issue by imitating the rescue
solutions in 1992 (drop UK's foreign exchange rate) to stimulate UK's financial market.
10. British sterling exchange rate (2002-2012)
As we can see from the figure above which the sterling and US dollar currency pair
exchange rate is based on yearly changing. between 2002 to 2012. The sterling
exchange rate towards US dollar on 5th Nov 2007 is 2.12$/£ which decreased
dramatically to 1.35$/£ on 19th January 2009, GBP sterling dropped nearly 7700
points, 27% within one year and a half, the largest decline since 1971.
11. Impact of Financial Crisis on India
India was comparatively insulated from GFC of 2008. Reasons :
1) A very strong and effective market regulators -RBI, SEBI, and most importantly
FMC(Forward Market Commission - regulates commodity derivatives and futures)
2)Lot of Indian sector at that time were not open to FDI. Indian growth story was fuelled by
home consumption and FDI contributed only 10% (even now) in total capital asset creation.
3)India felt the heat when due to GFC, Euro and later global meltdown happened .. this affected
exports and thus balance of Payment, CAD and thus Indian govt started to cut down on
expenditures (capital as well as revenue). This further led to slow creation of direct productive
assets that further created less capital and employment in the economy
So immediate impact of GFC 2008 wasn't that great but India felt the heat later from 2012 and
onwards
GDP growth rate in 2007-08 -9.3%
2010-11 -7.5% .
2012 -13 -5% ( we started to slow down when other countries were recovering)
12. Measures Taken By UK Govt.
Recapitalization gave banks the capital they needed to remain in operation, while loan
guarantees helped to ease conditions in the money market. However banks still sought to
strengthen their balance sheets by reducing lending, so creating a severe credit squeeze.
This had adverse effects on both companies and households, which found bank finance hard to
obtain. The squeeze on bank credit persisted despite the deep cuts in the Bank rate and
forecasts for GDP growth in 2009 were cut back to minus 4.0 per cent, confirming that the
economy was heading for a severe recession.
Further measures were introduced on January 19th to relieve the situation.10 The Bank
announced a new Asset Purchase Facility (APF) to buy up to £50bn of commercial paper and
other securities in exchange for Treasury bills.
A second measure provided for the issue of £50bn Asset Backed Securities for new mortgages,
bearing government guarantees.
The third measure was the most controversial because of the potential obligations falling on the
taxpayer. It was announced on February 26th that Government insurance was to be made
available to banks against future losses on toxic assets under an Asset Protection Scheme (APS).
13. Royal Bank of Scotland and Lloyds Banking Group, both substantially nationalized under the
recapitalization provisions of the Darling Plan, participated in the scheme, and the Treasury
insured £585bn of their holdings of toxic assets.
The Asset Protection Scheme was intended to reduce banks’ fears about exposure to toxic assets
and to encourage them to increase lending to companies and households. Both banks
participating in the APS gave formal undertakings about increasing their lending (Bank of
England, 2009). The insurance of losses on toxic assets under the latest UK proposals has been
criticized because of the risk to which it has exposed the taxpayer.
However, the Bank’s scheme has encountered less difficulty than the plan, introduced by
Geithner , the newly appointed US Treasury secretary in the Obama administration, to replace
the Paulson Plan. Under the revised plan the TARP has been used to recapitalize banks, either
through government assistance or through the injection of additional private funds, while toxic
assets are to be dealt by the PPIP (Public-Private Investment Plan), which is due to start in July.
The plan has not resolved the basic issue of the valuation of toxic assets held by banks, which
are to be purchased by private agents with public financial support. Banks are likely to resist
selling assets cheaply, but potential purchasers will only be induced to purchase assets if prices
are attractive.
14. Conclusion and Learning outcomes
How did it come to pass that in 2008 our nation was forced to
choose between two stark and painful alternatives — either risk
the collapse of our financial system and economy, or commit
trillions of taxpayer dollars to rescue major corporations and our
financial markets, as millions of Americans still lost their jobs,
their savings, and their homes?
The Commission concluded that this crisis was avoidable. It
found widespread failures in financial regulation; dramatic
breakdowns in corporate governance; excessive borrowing and
risk-taking by households and Wall Street; policy makers who
were ill prepared for the crisis; and systemic breaches in
accountability and ethics at all levels.