Financial Crisis Of 2008 Essay

Claessens, S. (2009). Competition in the Financial Sector: Overview of Competition Policies. Retrieved on 8/22/2013,

In the past, the ruling financial systems, such as agencies and laws, led to certain areas of the market without regulation. One of the areas, lacking regulation, was the protection of consumers from aggressive or “bad” financial products. In this sense, Title X of the Dodd-Franck Act creates a new regulatory agency, the CFPB, whose mandate and mission is

The IFRS adoption started in 2002 with the European Union embracing with the AS regulation, as a way to increase the comparability between the countries and their financial statements. This required the European companies to be listed under the European Union securities market and make their consolidated financial statements in accordance with the International Financial Reporting Standards. Though this not only included the European members' state but also countries that belong to the European Economic Area (EEA); as a way to prepare their financial statements in a consolidated way in regards to the IFRS principles (Deloitte Global Services Limited, 2017). The EU has adopted the same directives in their accounting

The reality of systemic risk made the task of regulating the financial system increasingly complicated, as the crises aren’t contained in one country or market. The extreme inter-dependence between the different agents is the main reason why we need regulation today, as some misconducts can cause a domino effect, affecting markets globally. The structure of the banking system in itself explains this process. In the finance industry, banks borrow money from other banks. If one bank fails, the one who lent the funds in the first place might also follow the same path, creating panic in the markets. The government’s first prerogative is to protect its citizens from these

Volcker Rule intends to restrict a banking entity from undertaking speculative activities and investments that put their customer funds at undue risk. It is also to avoid a repeat of the financial crisis of 2008 and avoid any systemic risks generated due to low capitalization of banks. This paper presents an overview of a compliance program under the Volcker Rule. It also covers the likely challenges Banks will face during implementation of such a program along with a suggested approach to overcome these challenge using the InfosysTM framework for implementation. Further

As the world today is moving towards technological adoption, the banking industry is no less to follow the similar pattern. Most leading banks have undertaken this front of making their organization technologically viable, but the one industry that has been left out was the MFIs.

The 2007–09 financial crisis highlighted both the vulnerability of the financial system to liquidity shocks and the associated role of central bank lending.1 In particular, the crisis was characterized by severe disruptions to the money markets where banks and other financial institutions acquire short-term funding. As institutions became unwilling to lend to each other, the cost of borrowing in short-term funding markets, as indicated by the spread between Libor and overnight index swaps (OIS), rose to unprecedented levels and the flow of credit in financial markets became severely disrupted (Figure 1). 2 To replace the funding normally provided in these markets and thereby keep credit flowing to U.S. businesses and households, the Federal

Having said that, there was an even bigger surprise. Economists and regulators, who are supposed to understand and use history, also did not learn from these experiences. Perhaps they were blinded by the political climate of the time. It is always hard to disagree with the “established science” of the time. After all, there was a time when everybody “knew” the world was flat. Only the “insane” thought otherwise.

For Brad, the discrepancies he identified on his trading platform allowed him to rally behind a possible solution in the form of the Thor framework. Even with its proven successes, Lewis points out that Thor is yet to receive widespread uptake and thereby stands a risk of discontinuation regardless of its potential benefits. Should the platform fail, the justice system will have played a part in dooming the economy to continued over-speculation, and massive losses in consumer confidence as risks continue to spread unevenly across industry players. Such an environment also poses the risk of future bailouts is any of these dominant trading companies makes significant losses in any of its investments. Regulatory measures should also make HFTs illegal due to their destabilizing effect, thereby helping to avoid the fallout that resulted from the ballooning of failed investment options in previous years. These measures will make the financial markets a less confusing environment to navigate, thereby enhancing investor confidence, and reducing the possibility of a recurrence of this trend in the

In this period hedge funds were registered for the first time and the agency’s examination program was revised to make it more risk based. Rules also were set for over-the-counter derivatives and asset-backed ¬securities.

Just after ten years of Asian financial crisis, another major financial crisis now concern for all developed and some developing countries is “Global Financial Crisis 2008.” It is beginning with the bankruptcy of Lehman Brothers on Sunday, September 14, 2008 and spread like a flood. At first U.S banking sector fall in a great liquidity crisis and simultaneously around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems. (Global issue)

Financial regulation is necessary and without an efficient set of regulations a country could see rises in unemployment, interest rates, and the deterioration of financial intermediaries. With the globalization of the financial industry, it becomes more and more common for businesses to seek financing outside of their county 's boarders. These innovations in the financial industry stress why it is so important for regulations to be created and changed to reduce risk and asymmetric information in financial systems.

The United States has the biggest financial crisis ever since WWII. Which lasted from September 1, 1939, through September 2, 1945. It was a six-year and one-day battle. Whether or not the seventy-eight trend is strictly reminding us that revanchism (the political manifestation of the will to reverse territorial losses incurred by a country) hasn't changed. I recall my economics professor warning his class at the time that, another crisis will happen soon. So he asked the class, what do we fear more, inflation or recession? Many answered recession, because if the number of jobs decreases we will be in trouble and health insurance will be taken away. Most employers are now seeking for more qualities, and it is just getting harder to get

Further the Primary objective of creating new single operator was to unify the market administration activities as the security commission faced many criticisms and faltered on the main function of regulating the market in order to give stability to the financial sector and thus resulted in ceasing of security commission. In 2011, when the financial markets authority act 2011 (FMC ACT) has been sanctioned and came into action on 1 may 2011, certain changes were made and one of the most important changes by this enactment is the introduction of new reinforced regulatory body. The FMA was designated under the crown entity act 2004, with supreme powers to monitor and control the financial markets by revoking the authorities of

During the last 30 years, derivatives have become increasingly important and widely used in the field of finance all around the world. Their increasing values made them impossible to be ignored because they have become much bigger than the stock market when measured in terms of underlying assets in so much that Global corporations and financial intermediaries trade billions of dollars of derivative contracts on a daily basis across a range of products and markets (Batten and Wagner, 2012).