Global Financial Crisis : Its Causes And The Global Responses Essay

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Assignment topic: Global financial crisis: its cause and the global responses
Introduction
The global financial crisis or economy crisis is commonly believed to have begun in July
2007 with credit crunch, when a loss of confidence by the US investors in the value of sub-prime mortgages caused a liquidity crisis. On the other hand, due to the big changes that took place over the last 20 to 30 years in the worldwide economy and the influence of 2007 financial crisis, it has re-emerged as one of the hottest topics on the agenda of accounting standards setters both under
United States of America (USA). Generally Accepted Accounting Principles (GAAP) and international financial reporting standard (IFRS). Current research seems well balanced across the prospective and consensus of fair value, lending ammunition both to those in favour and to the opponents of fair value accounting. Subjectivity, estimates and managerial discretion permeate the concept, definition and measurements of fair value, leaving such measurements open to an aggressive use of judgement and estimate. However, fair value accounting is more closely related to the needs of a globalized and information-based economy and is likely to grow in importance and use in the future. Therefore, this essay will discusses evidence and summarizes some current papers on the informational impact of fair value measurements on market participants.
Additionally, it will examine the responses put forwards by developed nations.

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