Answer to Question #168276 in Management for Vidal

Question

Give your reaction about Global Financial Crisis. With atleast 3 pages

Answer 1

• In a financial crisis, asset prices see a steep decline in their value while businesses and consumers are unable to pay their debts and financial institutions experience liquidity shortages.
• The financial crisis is often associated with panic when investors withdraw out shares because of fear of the assets and this can be limited to banks.
• A crisis can occur if assets are overvalued.

The following are global financial crises.

• Uncontrollable human behavior.
• stock crash.
• regulatory absence.
• loosened lending standards-this is due to the result of a sequence of events.
• complex financial instruments-this occurs when some assets such as house prices fell thus borrowers began to default on loans that are worth more than their homes which lead to a decline in prices.
• The financial regulatory environment touches every regulatory body and every financial service business.

-Greater investor protections were introducing a new consumer protection agency.

-The introduction of processes and tools which help with winding down of failed financial institution from the past decades seemed on the verge of collapse due to markets work.the right price will always find a buyer and a seller leading to a far better than a few government officials at determining the right price.