INTRODUCTION
The term of financial crisis means that the situation happen when some of financial assets going loss and crashed a large amount of the nominal value. It would effects to the financial institutions when investors take out or withdraw all of their assets in the banks. This is because those of investor expect that the value of the assets would fell down if them saving in that institution.
Besides that, the financial crisis also can be defined when the assets in financial institution is over valued. The valued of the assets would be drop rapidly if the price fall in the lower price and give the bad impacts on our economic. The economic was suffered effects of the offering lower goods price and the business cannot run well because not profitable.
There a few type of financial crisis which are involved banking crisis, speculative bubbles and crashed and international financial crisis. All of the crisis have the own factors that financial crisis happen. Firstly, banking crisis happen because of the larger withdrawal the amounts of money. As we know, the bank was make the investment using the money that people invest. The banks can make more profit when invest of that capital. Logically, if everyone want withdraw all of the money at the same time the bank will suffer insolvent.
Secondly, speculative bubbles and crashed. The factor of this crisis is about the buyers buy the assets in the purpose to resell these assets with the higher price in the future. The things are riskier in assets price effects on market participants focus in these assets to resell it. Thus, it is difficult to predict whether an assets price actually equals to the fundamental value. So, it is hard to detect bubbles reliably.
Lastly, inter...
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...try reportedly 1.9 million register migrant workers and 600,000 unregistered ones. Thus, to solve this problem Malaysia still can hired those workers for the services and required some skill but should ensure that they treated fairness and compulsory to have legal ways needs the permits.
In other side, building good governance and ethical regulatory framework. Obviously, some of the companies do not follow the rules under Bursa Malaysia Listing Requirement and Malaysia Code Corporate Government. We can see some of the companies still have corruption in financial system and then them manipulated the record so that the corruption clear from others. This attitude also can bring to the economic recession if the peoples still using the dirty ways. So, the government should concern and take actions to maintain the social cohesion and reduce the corruption.
CONCLUSION
The stock market expanded rapidly during the period of 1921-1929. At this time investors were optimistic about the stock market, so they traded stocks, which caused the stock prices to rise. The stock market boom led to asset prices rising at a fast pace. Which in turn outweighed the true value of the assets. Eventually, since the stock market did not reflect the true value of the stock, this led to a huge bubble followed by a crash. This crash is also known as the Great Depression that led to a severe economic crisis in the United States.
It made benchmark interest rate remains low. Then the excess liquidity made the asset bubble. Finally, the burst of asset bubble thumped the financial system. (Pierpaolo,B and Woodford,M, 2003)
The global financial crisis affected the many advance economies, particularly the United States. Unemployment significantly increased, people were evicted from their homes, and the search for employment was a dead end. However, Canada was not affected with the same force as the United States: “Canada’s financial sector was less affected than most advanced economies and it had the highest bank soundness rating in the World Economic Forum surveys from 2007-2008 through 2012-2013.” Despite the relatively stable status of the Canadian economy, Canada was very much involved in the review and improvement of international financial regulations. Canada was in a position to make changes to financial regulations due to their perceived experience in the matter, as Canada escaped the crisis relatively unscathed. Canadian delegates were placed in charge of four core areas in the reformation of financial policy and, “in all these areas, Canada was able to successfully push for reforms that resonated with its experiences and interests in enhanced financial sector regulation and supervision.” This crisis, and the successful reformations that came out of it, further installed Canada as a leader in economics, firmly inaugurating them as the world’s best bankers.
The financial crisis occurred in 2008, where the world economy experienced the most dangerous crisis ever since the Great Depression of the 1930s. It started in 2007 when the home prices in the U.S. Dropped significantly, spreading very quickly, initially to the financial sector of the U.S. and subsequently to the financial markets in other countries.
First, when the stock market crashed banks began to shut down causing havoc because people were not able to make transactions. (Could not deposit or withdraw money.) Since people were not able to access their money people were beginning to get frightened on the possibility of not being able to pay their bills, or be able to provide enough to maintain food on the table for their families.
When the stock market started failing, many factories closed production of all types of goods. Businesses and banks started closing down and farmers fell into bankruptcy. Many people lose everything, their jobs, their savings, and their homes. More than thirteen million people are unemployed. The Great Depression caused major political changes.
The recent Global Financial Crisis (GFC) initially began with the collapse of credits and financial markets, which caused by the sub-prime mortgage crisis in the US in 2007. The sub-prime mortgages were given to high-risk lenders (with bad credit history) who were in danger of defaulting, which eventually caused a global credit crunch, where the banks were unwilling to lend to each other. In October 2008, the collapse of the major financial institutions and the crash of stock markets marked the peak of this global economic slowdown (Euromonitor International, 2008).
It hard to raise funds on the international markets, and this happen to many country. Also in Australia, it has the worst housing property bubble in the world, it higher than New Zealand, UK, Canada and US. When people want to buy houses in Australia, they need to borrow found to pay the debts, therefore it might let banks faces many loans and make banks had a liquidity crisis. When bank makes a loan, they will create new money. Too much money and too quickly will drop the cash value in the world.
Securities Commision Malaysia. (2014). General Article: Corporate Governance. Retrieved March 26, 2014, from Securities Commision Malaysia: http://www.sc.com.my/corporate-governance/
In 2008, the world experienced a tremendous financial crisis which is rooted from the U.S housing market. Moreover, it is considered by many economists as one of the worst recessions since the Great Depression in 1930s. After bringing a huge effect on the U.S economy, the financial crisis expanded to Europe and the rest of the world. It ruined economies, crumble financial corporations and impoverished individual lives. For example, the financial crisis has resulted in the collapse of massive financial institutions such as Fannie Mae, Freddie Mac, Lehman Brothers and AIG. These collapses not only influenced own countries but also international scale. Hence, the intervention of governments by changing and expanding the monetary and fiscal policy or giving bailout is needed in order to eliminate and control enormous effects of the financial crisis.
Financial crises have influenced the os of financial markets in past. The most important the Great Depression in 1929-30, the 1970s inflation failures and the banking difficulties in the 1990s led to problems in the financial markets causing serious disturbance. The recent financial crisis which became known in 2007, though the roots were implanted much earlier, has been the worst situation financial markets have ever faced.
Time will occur start with economic downturn, political unstable, lost of confident level of the investor for the reason of diseases that present that time. It is also possible that they are no more country we call Malaysia.
In the late 2000s, the World suffered from a big global economic crisis which caused “the largest and sharpest drop in global economic activity of the modern era”, in which “most major developed economies find themselves in a deep recession”, according to McKibbin and Stoeckel (1). Because its consequences have a very big impact to the whole world, many economists and scientist have tried to find the causes of the crisis; and some major causes have been emphasized are greed, the defection of the free market system, and the lack of prudent regulation and supervision. This essay will focus on the global imbalances, one of the most important causes of the current economic crisis.