- Outline of global financial crisis
- Causes of the crisis
- Evolution, effects and response of global financial crisis.
- Global solutions for the crisis
Our essay about global financial crisis will contain the same parts. Each part will present current information about the topic stated in the subtitle.
Outline of global financial crisis
Financial crisis which is growing in the world today is considered to be the worst financial crisis in the world since the Great Depression that took place in 1930s. Younger generation that is accustomed to new phase of globalization mild recessions the misery of Great depression doesn’t mean anything but a legend. However nowadays we experience something even more dangerous for our economy. Global financial crisis affected almost every country of the world with independent economy and received extensive coverage in the international mass media. Mortgage crisis, credit crunch, private defaults, bank failures and massive layoffs are just a few from the huge list of financial crisis visible aspects.
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Causes of the crisis
While only few predicted the financial catastrophe, almost everyone has an explanation as to why it happened. Economists claim the reasons to be painfully simple.
- Too big amount of foreign money that flew into the USA from Asian countries and China in particular.
- Availability of easy credit that meant that too many people had borrowed for buying the property they couldn’t afford. These loans were bundled by bankers and sold to the investors that didn’t understand the complexity of these bundles and the risks that were inherent in them.
- Failure of the government in regulation of the activities of the banking behemoths.
Though these causes seem to be quiet reasonable, a lot of complicated explanations will surface in the years to come due to the ongoing nature of the crisis. And yet the root of the financial depression may lie in the fundamental human instinct called greediness.
Evolution, effects and responses of global financial crisis
Global financial crisis has touched every industry of the world market. A lot of financial powerhouses had gone bankrupt. Mortgage giants had to be bailed out. USA government attempts to save industries has led to the increased budget deficit. Some experts predict that the epicenter of global power may shift away from the USA before the crisis ends. At the same time it has become clear that there is a strong necessity for Asian countries in restructuring domestic economies to encourage consumption. What initially was a local problem of excess credit in the United States has effected every member of global community. It is expected that the crisis of 2008 will be known in history as the first full-blown global crisis.
Global Solutions for the Financial Crisis
Financial specialists tell that in order to bring the global financial crisis to the end it is important to overcome every single reason that caused this crisis. Economists and central bankers still struggle to find a way out of the mortgage crisis. Government should restore consumer and investor confidence, then focus on designing regulations that would encourage responsibility and a long-term outlook. Furthermore, the need for global oversight of the banking industry has to be recognizes, either by strengthening existing institutions or by creating new international authorities. Initial certainty for this crisis is that no localized solutions for a problem that extends throughout the world can be found.