Comparative Analysis Of The Effect Of Recession

2992 Words Dec 10th, 2014 12 Pages
1. Proposed Title
Comparative analysis of the effect of recession; a case of UK companies in different industries .

2. Background or Rationale of the Project
The year 2008 saw the world usher a new era in the role of central banks in protecting the economy. Banks were increasingly coming under pressure following the collapse of the subprime mortgage market in the US and resulting contagion across the globe. The result was a widespread crisis of a global proportion (Atkinson, Luttrel & Rosenblum 2011).
Most researchers believe that the recent recession in UK economy is entirely attributable to the 2008 financial crisis. The later resulted from extreme lack of liquidity in the market as banks refused to lend because of elevated levels of risk that was inherent in the market. The Bank of England embarked on a process of releasing funds to the market to restore the financial system back into equilibrium. In the meantime, reduced levels of liquidity in the economy as well as dampened confidence led to a major decline in the economy (Atkinson, Luttrel & Rosenblum 2011).
After the world’s central banks intervened, the global economy started to show signs of stabilization and recovery. Confidence started to grow and credit started flowing smoothly in the economies. However, major corporations had already experienced major losses in their financial statements and lost confidence in their main markets. Besides, increased regulations that followed the aftermath of the crisis…
Open Document