Introduction
The banking crisis in Cyprus resulted in economic instability in the country. This prompted for rapid measures by the government, the central bank and the European Union in general. Various policies were implemented to counter the effects of the crisis. The adopted policies were designed to restore financial stability (Weisenthal 2013).
Government policies
The government of Cyprus was swift in the introduction of policies that would save the economic situation in Cyprus and restore the confidence of investors. This is evident through the implementation of a number of policies. In the year 2012, the government of Cyprus introduced stringent measures that were focussed on reducing social expenditure in a way that the poverty situation in the country would not be worsened. The government targeted benefits such as the student grant and the universal child benefit (Hobson 2013).
Another policy that the government adopted was increasing the rate of value Added Tax (VAT) and excise duty on commodities such as property and oil affected everyone. This was a measure that was meant to help bailout financial deficits. Additionally the government also introduced amendments in social policy. Examples of these included removal of mother’s allowances, Easter allowance reduction for pensioners, grant reduction for different schemes (Neuger 2013).
The third policy measure that the government adopted is the introduction of an economic adjustment programme. The program was designed to cater for medium and the short-term financial challenges that Cyprus was faced with. The program had a number of objectives which included restoring the stability of the banking sector through approaches such as financial institutions downsizing and addres...
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... policies introduced by the government, the Central Bank of Cyprus and the EU in general saved the country from total collapse. The policies had both advantages and disadvantages but their advantages were greater than the disadvantages making their introduction worthwhile.
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The financial crisis of 2007–2008 is considered by many economists the worst financial crisis since the Great Depression of the 1930s. This crisis resulted in the threat of total collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. The crisis led to a series of events including: the 2008–2012 global recessions and the European sovereign-debt crisis. The reasons of this financial crisis are argued by economists. The performance of the Federal Reserve becomes a focal point in this argument.
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The bank failure in Jamaica illustrates how negative mindsets and behaviors can devastate the financial system and disrupt economic growth. The primary role of any bank is to safeguard its customer’s money, offer interest rate on deposits, lend money to creditworthy individuals, and make sound investment decisions to maximize shareholder value. Because of rapid economic growth between the late 1980s and early 1990s in Jamaica, the Central National Bank (CNB) and Worker’s Savings and Loans Bank (WSLB) loosened their monetary policies, provided preferential interest rates and extended credit beyond what was reasonable to members of its own board of directors, managing directors, and officers of the bank. These actions posed significant risks to the bank and its future.
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Turkey’s economy has weathered some spectacular pratfalls in the past, with a major economic crisis in 2001 almost bringing the country to its knees. What’s different in 2004 from the previous "recoveries" is how committed Turkey is to establishing firm economic footing once and for all. The government is swallowing the International Monetary Fund’s painful economic medicine, making tough choices for fiscal discipline.
Since the turn of the millennium Ireland witnessed unprecedented growth, in stark contrast to the economic hardship of the 1900’s. Ireland became one of the most prosperous countries in Europe during the 2000’s. Times were good for Ireland as unemployment was low, growth and GDP was growing year on year and inflation was constant. In 2008, all this was to change and Ireland witnessed the worst recession in its history. The banking crisis, the construction sector and poor regulation were the major contributors in the Irish recession. A fiscal crisis erupted, NAMA (National Assets Management Agency) was established to secure bad loans in banks, and a EU/IMF bailout was agreed which burdened Irish taxpayers. I will explore the causes and consequences of the crisis in this essay.
Towards the end of the 1990’s, the Irish economy was booming, unemployment rate fell to around 4% and productivity was continuingly to grow. However, from 2002 onwards, the nature of the boom started to alternate. Labour output was no longer increasing, inflation was excessive and progression in gross domestic product (GDP) increasingly became related to the housing market. By 2006, although the public finances still seemed strong, this was misleading; the Irish economy was heavily dependent on the housing boom. The covered banks accounted for over 65% of the overall growth in property- related lending in Ireland (including 100% mortgages and tracker mortgages) and over lending to developers in Ireland, further highlighting the bankers’ greed.
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