Introduction of Malaysia Bond Market

Bonds require a minimum amount of money to purchase and a minimum length of time to hold on to the bond.

| |A bond debenture is a legal document that details all of the conditions relating to a bond issue. |

Typically these types of bonds are voted for (approved) and paid back by the local community (known as voted indebtedness); payments are collected with

* Bond - A type of debt or a long-term promissory note, issued by the borrower, promising to pay its holder a predetermined and fixed amount of interest each year. Bonds provide the borrower with external funds to finance long-term investments

Typically these types of bonds are voted for (approved) and paid back by the local community (known as voted indebtedness); payments are collected with property

There have been few financial crises in the United States. The Global Financial Crisis of 2008 to 2009 was the most recent and before that was The Great Depression of the 1930s. The Global Financial Crisis actually began in 2007 when prices of homes tanked. It not only affected the U.S. but it also affected economies overseas. The entire investment banking industry, some of the biggest insurance companies, enterprises government used for mortgage lending, top mortgage lenders, the largest savings and loan companies, and two of the largest commercial banks were many of the financial sectors affected by the crisis. “Banks stopped making loans, share prices plunged throughout the world and most of the world plummeted into a recession” (The Financial Crisis of 2008: Year In Review 2008,” 2009, para. 1).

In the following essay, I will briefly summarize some of the main events leading up to the global financial crisis. Following this, I will discuss the effect this had on the banks and ergo the credit supply, then examine how this contributed to the corporate failure. I will also pay some attention to how the market imperfection can affect firms real decisions. Finally, I will sum up the main points of the essay.

Debt securities include very debt tool that is available for buying and selling inside two groups and have understanding of some common terms like the notional amount or also known as the borrowed amount, maturity or renewal date and interest rate. Debt securities involves corporate, government and municipal bonds, CDs, collateralized securities ( like CDOs, CMOs, GNMAs) and zero coupon securities. (Investopedia, 2015). On the financial records, the debt securities are documented in the type of bonds, collateralized securities and preferred stocks.

Public bond: provides more money than other means, with more maturity, but has a negative carry.

The Global Financial Crisis of 2007-2008 has been studied by several economists, and different causes have been identified, both primary and secondary, which intensified the overall impact of the crisis. In my view, the Global Financial Crisis resulted due to a culmination of several policies that interplayed with each other, and significantly influenced all sectors of the economy, from consumers to the government. In this essay, I will be addressing the main underlying causes of the crisis, how they originated, the extent of their impact, and how they compare with other financial crises. I will conclude with an analysis of policies that have been undertaken, and initiatives which should be implemented to prevent future crises.

The recent Global Financial Crisis (GFC) initially began with the collapse of credits and financial markets, which caused by the sub-prime mortgage crisis in the US in 2007. The sub-prime mortgages were given to high-risk lenders (with bad credit history) who were in danger of defaulting, which eventually caused a global credit crunch, where the banks were unwilling to lend to each other. In October 2008, the collapse of the major financial institutions and the crash of stock markets marked the peak of this global economic slowdown (Euromonitor International, 2008).

A bond is a "security" which gives the holder a financial claim on the issuer. This claim protects the holder in circumstances in which the issuer is unable to pay the amount due. It is made formal by the "trust indenture", a legal document, which specifies all of the bond's features and the legal rights and obligations of all the parties to the agreement (http://www.finpipe.com/bndchar.htm).

During this time, the banks were robed out of any liquidity. BNP Paribas, a major bank of U.S had to sell its hedge funds to get in some cash. Excessive risk taking by these banks robbed the capital out of the system. Many major banks failed at this time. Even, the banks which were given the status of ‘Too Big to Fail’ also witnessed a major collapse, ruining the financial health of the institutions. Furthermore, the Federal Reserve too granted loans and aid packages to bail-out these banks, which led to magnify the world financial system and the health of the U.S economy. An Expansionary fiscal and monetary policy was adopted.

Along with the many different characteristics of bonds such as, the way the pay their interest, the market they are issued in, the currency they are payable in, protective features and their legal status. Bond issuers may be governments, corporations, special purpose trusts or even non-profit organizations. Usually it is the type of issuer or the particular nature of a bond that sets it apart in its own category.

Foreign bonds are bonds sold by a foreign borrower but denominated in the currency of the country in which the issue is sold.