Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
The impact of the financial crisis on the global economy
Effect of the 2008 financial crisis on the global economy
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Introduction
This essay is about the corporate governance, regulation, leverage and incentives in the financial service industry. This essay also includes the UK credit crunch crisis and the global economic crisis.
The UK economy is in recession. Due to fall in demand for goods and services reduce production and unemployment increases. A fall in demand has an effect on industries. In some case firms close down and loss of job increase.
The world has become a small village due to the internet, leading to world competition. British market is suffering because costs of production are higher than in other parts of the world such as India and china. On the other hand, credit crunch due to bank failures. However, china and India have a healthy economic growth which benefit from the US financial crisis (© Emerald Group Publishing Limited, 2009).
The bank of England main function is to control the money supply in the UK economy by manipulating interest rates. In case of recession the bank of England will continue to reduce the interest rates to encourage business to invest in plant and machinery and it will become cheaper for consumer to borrow which will finally lead to stimulating demand for goods and services and correcting the levels of unemployment as well as more goods and services to increase demand and employers will find it more profitable to employ more people (© Bank of England, 2009).
The Bank of England financial system is plays an important part in the UK economy and modern life. This financial system is trying to bring together savers and investors, which will benefits themselves and the UK economy (© Bank of England, 2009).
Corporate governance is a set of relationship between a company’s management, shareholde...
... middle of paper ...
...rporate Reporting: corporate governance, The combined code. 2nd Edition. United Kingdom
Keinert.C (2008) Corporate Social Responsibility as International strategy . A Springer Company
Sloman.J (2009) Economics and the Business environment: Demand and the consumer.2nd Edition. England. FT prentice Hall.
Electronic journal databases
Emerald Group Publishing Limited (2009) ‘Special Issue on changing patterns global growth’. Available at: http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=4F280BA70223188AC2C337BFF751580D?contentType=NonArticle&contentId=1747168 [Accessed: 06th November, 2009]
Emerald Group Publishing Limited (2009) ‘What is corporate governance’? pp624.[online] Available at: http://www.emeraldinsight.com/Insight/ViewContentServlet?Filename=/published/emeraldfulltextarticle/pdf/2680070507.pdf [Accessed: 27th October, 2009]
A recession is where there is temporary economic deterioration which lasts longer than a few months, sometimes years. This can be seen by the employment rate decreasing and the reduction of trade and industry work. This is determined by the Gross Domestic Product (GPD) which is a government statistic which shows the total country’s economy movement. This is measured every 3 months (quarterly) and it is said that if after two consecutive quarters the GPD is down then the country is seen to be in recession. (Kollewe, 2009). The most recent recession in the UK kick-started in 2008, which was seen to be one of the worst recessions the UK has seen since the Great Depression. In July 2008 was when it became increasingly obvious that we was about to enter a recession; the unemployment rate kept rising, the housing industry started to cut thousands of jobs and the whole-sale industry was declining in production. (Allen, 2010)
the high value of the pound. But overall the UK economy is in a good
The years 2008 shined a light on a group of people who were considered high society. When the stock market crashed in September 2008, the world shines a spotlight on the financial corporation. Words such as hedge fund manager and financial instrument such as credit default swaps are not words not known to everyday citizens. The economic downturn forced society to ask question not normally asked.
Stewart, J. ‘The Changing Nature of Financial Regulation in Ireland’ , Journal of Financial Services Research , 1996.
It has been 5 years now, but the world economy is still hovering over with ill effects of global economic recession. Different economist define recession in a different way but one common definition which can be derived is that recession is long lasting and prime reason for slowdown to economic activity(GDP). In terms of measuring the effects of recession, the broadest indicator of economic activity is real gross domestic product(GDP). Our following section will discuss how the economic activities in US has actually decreased since the beginning of market turmoil.
Investment banks, Rating agencies and Insurance companies are key components of the financial market. In this presentation, I’m going to explain how these three key roles worked together to create the 2008 financial crisis.
The Federal Reserve board made up of appointed governors is basically in charge of making sure that the valves and pressure is relieved or tightened as needed in order to make sure that the economy continues to function. The primary purpose of the Fed is to oversee the structure and security of the commercial banking system. Most important responsibility that the Fed has is to make sure that the fifty banks that hold approximately a third of the nation’s bank deposits positive is kept secure (Grieder, 1989). The shifts that are created by the Fed in terms of the money supply changes the way in which banks respond to their consumers, which creates a great deal of responsibility and power in this one social
The largest cause of unemployment can be attributed to recession. The term recession refers to the backward movement of the economy for a long period. People spend only when they have to. (Nagle 2009). With people spending less there would be less money in circulation therefore, enterprises would suffer financially and people would suffer too. This is so because recession reduces the fiscal bases of enterprises, forcing these enterprises to reduce their workforce through layoffs. These enterprises lay off their workers in order to cut the costs they incur in terms of wage and salary payments.
Bibliography: Turnbull, S. (1997). Corporate governance: its scope, concerns and theories. Corporate Governance: An International Review, 5 (4), pp. 180--205.
The end of 2001 and the start of 2002 saw the end of a period of magnified share prices and booming businesses. All speculations of misrepresentation came to light and those firms which once seem unconquerable were now filing for bankruptcy. Within this essay, I shall discuss the corporate governance mechanisms and failures which led to the Enron scandal resulting in global corporate governance reforms being encouraged.
Tsui, J., & Gul, F. A. (2002). Consultancy on a Survey on the Corporate Governance Regimes in Other Jurisdictions in Connection with the Corporate Governance Review. Hong Kong: CityU Professional Services Ltd.
Nottingham Trent University. (2013). Lecture 1 - An Introduction to Corporate Governance. Available: https://now.ntu.ac.uk/d2l/le/content/248250/viewContent/1053845/View. Last accessed 16th Dec 2013.
Sloman, J & Wride, A (2012). Principles of Economics. 8th ed. Essex: Pearson Education Limited.
The office of the Director of Corporate Enforcement (ODCE, 2015), Ireland defines Corporate Governance as “the system, principles and process by which organisations are directed and controlled. The principles underlying corporate governance are based on conducting the business with integrity and fairness, being transparent with regard to all transactions, making all the necessary disclosures and decisions and complying with all the laws of the land”. It is the system for protecting and advancing the shareholder’s interest by setting strategic direction for the firm and achieving them by electing and monitoring the capable management (Solomon, 2010). It is the process of protecting the stakes of various parties that have their interest attached with a company (Fernando, 2009). Corporate governance is the procedure through which the management of the company is achieving the goals of various stake holders (Becht, Macro, Patrick and Alisa,
Corporate governance is the set of guidelines that determines the control and organization of a particular company. The company’s board of directors is in charge of approving and reviewing changes to this set of formally established guidelines. Companies have to keep in mind the interests of multiple stakeholders, parties who have an interest in the company. Some of these stakeholders include customers, shareholders, management, and suppliers. Corporate governance’s focus is concentrated on the rights and obligations of three stakeholder groups in particular: the board of directors, management, and shareholders. Corporate governance determines how power is split between these three stakeholders. A company’s board of directors is the main stakeholder that influences the corporate governance of a company (Corporate Governance).