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Global financial crisis
Since the Asian financial crisis in July of 1997, the global financial crisis was ticking like a time bomb, which eventually went off in the mid 2008. Around the world, there was an utter mayhem, stocks crashing, large financial organizations either collapsed or bought out, shattered financial system and the list is endless. The worst of all, the wealthiest nations even had to depend on rescue packages in the like of bail out for strengthening their overall system. Is it not ironical that the once safe guards of financial system, these investment and financial institutions need safe guards? Such is the intensity of the global financial crisis that AIG has to bank on federal bail-out, Lehman Brothers already bankrupted; the once stanchion of financial know-how are now left to the mercy of people and its government. Global meltdown even didn't spared countries and we have in front of us the crisis of Iceland. The north Atlantic country is waiting for $10.2 billion help form IMF and various European nations. The root cause behind the global financial crisis was bad lending policies with add-on market instability. These two were working and brewing in conjugation with each other. Everyone assumed that the housing prices are rising and would continue to do so in the near future but it didn't happen. Another blunder, defaulter cases by various borrowers. They could repay the loans on time and since the property prices were already on the back-seat, lenders could not do much. It has been estimated that almost trillion dollars were because of such phenomenon. Though bail out have been proposed, but would it able to replenish such a huge loss, would it able to bring back the bankrupt Lehman Brothers on track. No, it won't. But if you see the other side of the picture it has helped AIG and promises to do so in the near future, if the necessity arrives. However, the permanent solution for global financial crisis would not be achieved as bail out and other methods are just temporary in nature or in fact do not have the potential to secure the future of the organization. Though global financial crisis has affected economy a lot but in other way it has also left a great lesson to all those financial analysts and world leaders. Wake up now or the economy will go for hibernation. It has even compelled economists to re-write everything on mortgage lending and re-think strategies to anchor companies. Without any doubt, if the situation, the day is not far when we will have to restart and rethink everything. Just imagine, what will happen then.


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