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2007-08 Financial Crisis: US and UK Financial Markets

In other words it is an agreements that oblige one party to make a payment or something else that is value or to promise to make a payment under required conditions to counterparty in exchange of interest, compensation against risk, or gain of rights (Laux, 2012). The most common financial instruments include stocks, which are issued by company in order to raise money from investors. When investors pay for stock they actually give money to company, in exchange they get ownership interest in the company (C. Spaulding, 2014). Another common financial instrument is check, which transfers money to the payee, the receiver of the check from the payer, the writer of the check. Other common instruments are bonds and loans, which allow investor to lend money to person or organization that issued the bond in exchange for regular payments of interest and principal. In addition to previous financial instruments there is also funds like exchange-traded funds, hedge funds, real estate investment trust and many other funds. These funds buy other securities earning interest and capital gains, which boosts the price of fund (C. Spaulding, 2014). Currency can also be used as financial instrument for capital gains, to offset risk or even to earn interest by exchanging the currency. Another very important financial instrument is insurance, which is a contract that promises to pay loss that occurred in exchange for a premium (Leote, J. n.d.). Last but not the least financial instrument is derivative, which will be defined in second part of this essay as it was one of the main reasons of Global financial crisis in 2007-2008.
             The Global financial crisis erupted in 2008 and has touched almost all nations around the world. It is the biggest financial crisis since Great Depression of 1930s and its consequences are being felt until today. The end of year 2007 marks the start of modern crisis, which originated from the collapse of subprime mortgage lending and securitized products in 2007, followed by recession of various industries in substantial scale (Valdez et al, 2010).


Essays Related to 2007-08 Financial Crisis: US and UK Financial Markets

1. Economics of Money, Banking and Financial Markets

According to Bloomberg the financial crisis in 2007-2009 caused damage to the banks shareholders of over $ 690 billion US dollars. ... The status of the US as the undisputed leader in global financial markets confirms the view that the origins of the global crisis must be sought in the US economy. ... Even then, the US stock market was overheated. ... Interconnected through the stock market, the crisis began to spread to those financial business structures, which are not engaged in mortgage lending, and the entire globalized financial and investment market. ... The analysis of the events of t...

  • Word Count: 1288
  • Approx Pages: 5
  • Grade Level: Undergraduate

2. Liberalisation Of Financial Markets

The main change in the financial markets recently has been that of increasing integration and globalisation. ... Against the regulation of international financial markets Following the Asian Financial crisis, the international financial institutions put the blame on capitalist policies rather than the liberalisation of capital movements. The financial crisis revealed some serious errors in the corporate governance. Nevertheless, the countries, which were hit by the crisis, were all regarded as economic "miracles" prior to the crisis. ... They seemed to ignore the main issues that had led to...

  • Word Count: 2133
  • Approx Pages: 9
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3. The World Financial Crisis

One factor that causes this change is a financial crisis. ... Even though this crisis started in the financial sector, it has affected literally everyone. ... Effects Although the financial crisis had a distinct origin - U.S.A - it did not stop there. ... Social Conditions Some people argue that the financial crisis has turned into a social crisis. ... This shows how as a nation we cannot just be firefighting the crises but we also need strategies to help us move away from the crisis. ...

  • Word Count: 1610
  • Approx Pages: 6
  • Has Bibliography

4. Dynamics of the Recent US Financial Crisis

The United Stated financial crisis began in September of 2008 when the most respected financial institutions fell. ... A sizable portion of this investing was in housing-related assets, making it vulnerable to a downturn in that market. ... So in this financial crisis, the majority of the credit is actually owned by other financial institutions or foreign governments. ... The Financial Crisis of 2008 affected the entire world, both developed and developing countries, the rich and poor, even if they had no control over the outcome. ... AIG then realized their derivative logic to test the market...

  • Word Count: 1379
  • Approx Pages: 6
  • Has Bibliography

5. Avoiding Another Financial Crisis

So be of good cheer; from now on, depressions and even recessions have been outlawed by the semantic fiat of economists; from now on, the worst that can possibly happen to us are "slowdowns".... This term is "financial crisis ". ... The stock market crash reduced American aggregate demand significantly. ... The credit crisis is a direct outgrowth of the fall in housing prices that began in 2006. ... Since August of 2007 when crisis became apparent financial structures and institutions took several actions regarding to it. ...

  • Word Count: 1664
  • Approx Pages: 7
  • Has Bibliography
  • Grade Level: Undergraduate

6. Australian Financial Market

The detailed and comprehensive information contained in this, the 14th annual Australian Financial Markets Report (AFMR) highlights one of the primary reasons for the Australian economy being one of the world's strongest performing in recent years - the existence of deep, liquid and sophisticated financial markets. The size and stability of Australia's financial markets play a vital role in the performance of the economy as a whole. ... While Australia has not been entirely immune to the volatility affecting global markets over the last 12 months, we have weathered the financial s...

  • Word Count: 398
  • Approx Pages: 2
  • Grade Level: Undergraduate

7. Capital and Financial Markets

Capital markets are financial markets concerned with raising capital by issuing long term securities. The securities in capital market are issued in primary market and traded in secondary market. The primary market is a market for new shares, where the secondary market is the market where existing securities are traded. ... And it makes them enable to estimate what the company's financial obligations will be at a specific point. ... Option is a type of financial derivative which is traded in capital market and represents a contract between two parties, the buyer and the seller where they...

  • Word Count: 649
  • Approx Pages: 3
  • Grade Level: Undergraduate

8. HK Vs Singapore As International Financial Centre

HK versus Singapore as International Financial Centres: its strengths and weaknesses An International Financial Centre (IFC) is a collection of markets that trade financial services or products and help to allocate resources or property rights efficiently. ... HK has always been in the top 4 ranking in Asia; however its relative position had a little change after the Asian Financial Crisis and Singapore is catching up with vigorous competition. ... In particular since the Asian Financial Crisis, their position as an IFC, has gradually climbed upwards. ... All the above factors of str...

  • Word Count: 1965
  • Approx Pages: 8
  • Grade Level: Undergraduate

9. Financial Crisis During the French Revolution

The events of 14th July were in fact the result of a series of events which can be traced back to 20th August 1786, when Calonne (the General of the royal finances) informed Louis XVI that the state was on the brink of financial collapse.2 For this reason (as well as others which will henceforth be examined), although the French Revolution was caused by a mixture of economic, social, political, and intellectual factors, on balance, the financial crisis was arguably the most significant factor in leading to the outbreak of the French Revolution. ... Before that happened, however, the financial...

  • Word Count: 3440
  • Approx Pages: 14
  • Has Bibliography
  • Grade Level: Undergraduate

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