...Global Financial Crisis: Likely Impact on Bangladesh [Abstract: The current financial crisis that originated in the United States and quickly spread to Europe and Asia could be a global crisis soon. Reckless lending by banks and financial institutions and slack regulatory system were at the root of the crisis, which is perhaps the gravest since the Great Depression of the 1930s. Amid a severe credit crunch, the rich economies have entered into a deep recession. IMF economists predict the global economic growth to fall from 5.6% in 2007 to 3.9% in 2008, and to 3.0% next year. Billions of dollars pumped by the rich and the emerging economies to bail out the distressed banks or to boost their economies have failed to stop the rot. Bangladesh is apparently immune from the crisis, its economy not being very tightly linked with the rest of the world. It has been enjoying a relatively healthy growth of exports, industrial activity and remittances. Yet, a prolonged recession in the rich countries may cause a slowdown in exports, inflows of remittances, foreign aid and FDI, thereby hurting GDP growth. IMF has said that GDP growth in Bangladesh this year will be lower – 5.5% instead of the officially projected 6.5%, if the global recession lingers. Bangladesh policy makers will need to stay alert to the possibility of the economy being hit by the global slump and adopt appropriate mitigating measures.] Introduction The United States economy is now experiencing a severe credit...
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...paper investigates the impact of real interest rate on national saving in five Association of Southeast Asian Nations (ASEAN) of Indonesia, Malaysia, the Philippines, Singapore and Thailand. We analyze impact real interest rate to nation saving for ASEAN starting 1991-2013. Through an analysis from Excel, real interest rate is found to have significant impact on national saving during different stage of economic. Extensions using a graph reveal the impact of real interest rate in ASEAN-5 and thus mainly reflect heightened concerns to national savings amid the Asian financial crisis and the global financial crisis. Keywords: real interest rate, national saving, financial crisis 1.0 Introduction The world’s average saving rate has been declining since the first oil shock and through the early 1990s. However this trend conceals a large and increasing dispersion of saving rates, particularly among developing countries. The large heterogeneity in saving behavior is associated to country and time differences in levels of development, growth performance, and fiscal and financial policies. The level of real interest rates has once again become the focus of policy makers' concerned. To understanding the response of national saving to changes in interest rates is central to many issues in economic policy. For example, a reduction in the budget deficit would probably cause interest rates to decline. If personal saving declined as a result, the overall increase in national saving...
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...Introduction IT industry and Globalisation 2008 Financial crisis and Impact on Indian IT sector Response steps taken by Indian IT firms (HCL, Infosys and TCS) Conclusion Introduction IT industry belongs to the servicing industry in India since India has not grown completely as Indigenous product developers in IT domain. So the growth and performance of Indian IT industry is completely attributed towards the institutions and organisations to which the software solutions or servicing is exported. It is very tough to comprehend and list out the types of macroeconomic shocks that an IT industry would face. The main reason for this would be IT sector as a whole doesn’t provide its software solutions not just one sector. It provides software solutions to almost all of the sectors like Manufacturing, Retail, Insurance, Banking, and Media, Entertainment so much more and still has scope in so many unexplored domains. Since the onset of globalisation in the early 90s, large capital influx and the crises that could be attributed with it have become one of the known risks. Large flows of capital into another country has created currency crisis in most of the countries. The most predominant of these shocks was recorded was in the East Asian countries. India never fell prey to these shocks and was effectively insulated from these shocks, until it has opened up its markets for investment by foreign players. The globalization and reforms of 90s...
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...Mid-life Crisis in Apes Introduction At middle age, a giant chimp would neither deceive his spouse nor purchase a red sports car on urge. However, studies have discovered that apes and orangutans face midlife problems just as certainly as humans beings do. Those discoveries, which were published in the Proceedings of the National Academy of Sciences, might upset tightly held faiths regarding the origins of human pleasure and the forces that cause impact on its peculiar route across the span of life (Jaques, 2002). If relatives of animals share human proclivity for grief, removal and irritation at the midpoint of life, most probably the midlife problem is in fact lead by biological reasons — not the exhausting liabilities of works and family and the genesis identity of our humanity (Franklin, 1999). The experience of chimpanzees dip in pleasure in their mid-age, much in the manner human beings do, recommending a biological interpretation for the midlife problem. Across several traditions, human beings inform a plunge in pleasure throughout their late-40s, a period when they usually sense less contented with their lives in comparison to their older and younger years. Chimpanzees also go through a type of midlife problem, discovered a new study. The astonishing outcome recommends that the blues of middle-age might be an outcome of biology, not tradition, and its evolutionary origins run profound (Ayers, 2008). The main reason for dividing the main body of this research paper...
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...escalations of global crises. With the monumental wars of the 20thcentury mankind, after putting in place institutional mechanisms, thought that the world would experience some measure of respite from crisis. This is not to be as the 21st century, even within its first quarter has witnessed horrendous increase in local, regional and global crises. From communal conflicts to internecine civil strife, to widespread terrorism; much of the capacity of man to confront these challenges has been overstretched. Non state actors have taken up the public space with such vehemence in inflicting harm and suffering that the prospects of combating them seem to multiple their numbers. Added to all these are natural disasters across the globe which farther the unintended consequences. No region of the world is exempted. As it is today, chances are if you watch any TV channel, listen to the radio, read newspapers or magazines, there is news about crises – fire outbreaks, flood disasters, terrorist attacks, kidnapping, explosions, car accidents, plane crash, cholera outbreak, invasions, arm smuggling, ship mishap, political, ethnic and religious violence including others too numerous to mention. The urgency to institutionalize a genuine crisis prevention mind-set instead of just focusing on crisis response is a total priority now! More so, the use of technology to bridge cultures, solve problems, and bring about crises resolution and prevention has been a well established fact. The internet’s...
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...Boyes & Melvin (2011). As it was announced on BBC News (2012) about how Chinese companies are moving to Bangladesh to make clothes even though China is a worldwide leader in the manufacturing businesses. Absolute advantage involves the specialism of trade benefit among countries, well as according to the law Comparative advantage is that ‘when one Country has fewer efficiency then it has absolute disadvantage with detail to the further Countries production of both merchandises, there is still a source for commonly useful trade’ Simatele (2013). Heckscher- Ohlin (H-O) theory is founded on two theories, the H-O theorem and the factor price Equalisation theorem. The following essay will outline the trade established on Absolute advantage, H-O Theorem, the theory of Comparative advantage and the way the theory opportunity cost can be used to explain Comparative advantage then examples will be given to illustrate the movement of Chinese firms to Bangladesh to make clothes. Lastly a conclusion will be given to sum up the essay. Absolute advantage according to Adam Smith’s innovative account of the case for trade, enclosed in The Wealth of Nations (1776), was contained in positions of absolute cost variances among countries. That is, Smith supposed that both countries will have advantage from the...
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...Report, 2009 pp. B) The BHP Billiton Petroleum sector has been the focus of big BHP investment dollars of late as the company looks to expand their operations. BHP-B Petroleum produced over 376,000 barrels of oil per day in 2009 and has maintained an impressive 9% annual growth rate since 2007. (Petroleum Annual Review, 2009 pp 5) BHP Petroleum operates in many countries across the world and is currently undertaking oil and gas projects in Australia, The Gulf of Mexico, Algeria, the UK, Pakistan and Trinidad and Tobago with the intention to expand into Malaysia, the Fawklands and Canada in the near future. (PAR, 2009 pp 5) The market for petroleum and indeed the mining industry as a whole was unsure what effect the global financial crisis would have and what action affected parties would take during the period. Regardless of the changes, such a large and important company as BHP would have to study the potential changes and start, if necessary, reformatting their financial planning/strategies and other control processes. These would have to be looked at on a whole organisational level; ranging from the BHP hierarchy all the way down to the smaller subsidiaries in order to accurately gauge the potential effects of the changes in the market. BHP put itself in a really good position early in the piece with its sensible investment strategy. BHP management identify, as they did in previous year reports, the need for caution whilst guiding such a large company through the current...
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...In the aftermath of the Global Financial Crisis, there were heightened concerns that a reduced availability of long-term finance and the resulting rollover risks would adversely affect the performance of small and medium-sized firms and hamper large fixed investments. Policy makers argued that, as a result, developing countries’ ability to sustain rates of economic growth sufficiently high to reduce poverty and ensure shared prosperity would be diminished. Recently, as corporates of emerging markets have benefited from favorable global liquidity conditions to issue long-term bonds, policy discussions focused on the stability risks of high leverage that could materialize when monetary conditions normalize. What does the evidence on capital structures tell us? In a new paper prepared for the Global Financial Development Report 2015/2016 on Long-Term Finance, Asli Demirguc-Kunt, Maria-Soledad Martinez-Peria and I study how the Global Financial Crisis impacted the capital structure of firms, focusing in particular on privately held firms and on small and medium sized enterprises (SMEs). We rely on a large dataset of about 277,000 firms from 79 countries, covering the period 2004-2011. The data are collected from Bureau Van Dijk in the ORBIS database. According to theory, leverage and debt maturity are expected to decline during a crisis because firms and providers of finance adjust to higher uncertainty, higher risks, and lower returns by stepping up risk and term premia (in...
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...research and many enthusiastic discussions among our group members, it has helped me understand a lot more about FMS as well as the financial crisis, specifically sub-prime crisis. To begin, from doing this project I have come to know that financial markets in the world are interconnected. When US financial system collapsed, with the demise of some of the biggest financial institutions in US, it jeopardised the whole world’s economy. Inflation soars, credit crunch were one of the few horrible effects that the breakdown of US financial system affected financial system worldwide. At the same time, the crisis shook investors’ confidence across the world, which led to low liquidity in financial market and subsequently a devastating global economy meltdown. Furthermore, I have learnt that risk management is indispensable in a financial system, a “make or break” factor. Though taking risk may provide us with a higher return, we can never be overly greedy and take too much risk without handling them probably as they may back-fire. What happened in US is an exact example of what we call “lesson learnt the hard way”. It has definitely shown the world’s investors how immensely vital risk management is in a financial system, proving its undeniable influence on financial market and services. In addition, by doing this project, it has taught me the importance of regulations. One of many reasons contributed to the shocking financial crisis in US is the lack of regulations. It allowed banks...
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...What are the causes of the global financial crisis? Name: Course: Tutor: Date: What are the causes of the global financial crisis? Introduction Achieving stability has always been the number one priority in any county or organization. Financial stability is probably one of the most sort after achievement everywhere in the world. When a country or company fails to attaining financial stability then things are deemed to go wrong. The global financial crisis brought about the worst kind of financial instability in the global economy. It started in the United States and spread all over the world like wild fire. Even the top performing economies in Asia like China were not left out. This economic turbulence brought about both economic and social hardships (Helleiner,1994) . This was partly blamed on the already established Capitalist ideologies that prevailed especially in the United States. This crisis exposed most economies to financial difficulties as it proved the dependence of most nations on dollar denominated financial transactions. The only way to salvage these economies was through fiscal and monetary interventions by the Governments of the day. Bail-out packages were presented to major economy drivers and industries to help ease the financial crisis that had affected their operation. The collapsing of large financial institutions like the Lehman Brothers bank brought about a lot of chaos in the industry. Large bailout packages were used to help revive...
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...US Financial Crisis US Financial Crisis This paper aims to describe the US Financial Crisis in terms of causes, impact, and remedial actions taken by the public and private sectors. It presents the thesis that the financial crisis is also a crisis of values that prompts a reevaluation of the premises of American capitalism. In particular, that prosperity is the foundation of peace and order. A review of literature provides the basis for a short commentary on the subject. Preliminary review of literature on the subject brings to fore some distinct patterns in consumer and investors behavior that make them peculiarly venerable. First is the tendency of investors to join the bandwagon of speculative investment and of putting their money where others put theirs. Second is an apparent lack of understanding on the relationship between risk and returns. Third is an apparent lack of appreciation for the principles of supply and demand. The principle states that excessive supply will reduce the price and demand for a product to the advantage of the buyer, while a lack of supply will increase demand and price of a product to the advantage of the seller. Causes Economists stress the importance of tracing the root causes of the financial crisis in order to provide a systemic solution to the present financial crisis. Most references present the cause of the financial crisis to be the “subprime mortgages.” However, subprime mortgages by itself did not cause the housing bubble...
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...Positive and Negative Effects of the Global Financial Crisis Harlita H. Tomlinson Capella University BMGT8114: Accounting in the Global Era Dr. Wendy Achilles June 8,2014 Table of Contents Abstract 3 Positive and Negative Effects of the Global Financial Crisis 4 Background on the Global Financial Crisis 5 Global Financial Crisis and Its Negative Effects 9 Lack of Financial Sector Regulation and Oversights 9 Increase in the Number of Bankruptcies 11 Global Financial Crisis and Its Positive Effects 12 Designing Regulations to Monitor the Financial Sector 12 Global Governance as a Side Effect of the Global Financial Crisis 13 Lessons Learned 16 Domestic Lessons Learned 16 Global Lessons Learned 17 Lessons from Romania. 18 The Role of Financial Executives in GFC 19 Conclusions 21 References 24 Abstract The first financial crisis of the twenty-first century has not yet ended, according to Gorton and Metrick (2012), the wave of research on the crisis has already exceeded any single reader’s capacity, with the pace of new work only making this task harder. The Global Financial Crisis is considered by many economists to be the worst financial crisis since the Great Depression. Global Financial Crisis resulted in the threat of the total collapse of large financial institutions, the bailout of banks by national governments, and market downturns around the world. In the aftermath of this crisis, the housing market declined significantly and has not...
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...Digital cameras operate by taking a picture or video by digitally recording the images, without the use of film or production of negatives. Digital cameras show the image on a display screen imbedded in the camera immediately after the picture was taken. The recorded images are stored on a memory card that often allows for much more data storage than a roll of film. Digital cameras can be connected to computers to download the images, and sending the images out for development is not necessary in order to immediately view the pictures. While originally digital cameras were simply intended to be an innovative way to capture images as opposed to cameras that utilized film, their purpose has come to exceed imitation. Digital cameras have become a visual communication medium, as the images captured with them can be downloaded, edited and enhanced, printed at home or sent to a studio, used for a presentation, or to share with others via the internet, all within a matter of moments. Demand in this industry continues to grow, and is driven by individual consumers, as well as commercial businesses. This growth can be attributed to three specific sectors: digital cameras that are tethered for both home and desk communication, digital cameras overriding the functionality of standard cameras, and digital cameras for use in applications for which film cannot effective operate. Several other industries require photographic services that cannot always be accomplished with film cameras, such...
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...REPORTS ON GLOBAL FINANCIAL CRISIS – 9 SESRIC REPORTS ON THE GLOBAL FINANCIAL CRISIS European Debt Crisis and Impacts on Developing Countries STATISTICAL ECONOMIC AND SOCIAL RESEARCH AND TRAINING CENTRE FOR ISLAMIC COUNTRIES (SESRIC) 1 SESRIC REPORTS ON GLOBAL FINANCIAL CRISIS – 9 2011‐2 Issue EUROPEAN DEBT CRISIS AND IMPACTS ON DEVELOPING COUNTRIES July – December 2011 SESRIC Reports on Global Financial Crisis : The financial crisis which started in July 2007, when investors lost their confidence in the mortgage‐ and asset‐based securities in the United States, has deepened during 2008‐2009 with a global reach and affecting a wide range of financial and economic activities and institutions in both developed and developing countries around the world. As the crisis deepened, the governments of major developed and developing countries as well as international financial regulators attempted to take some mitigation actions and coordinate efforts to contain the crisis. Given this state of affairs, the SESRIC has been preparing short reports since May 2009 with the aim of monitoring the developments related to the current global financial crisis at the global, regional and national levels. In particular, these reports focus on the impact of the crisis on the economies of ...
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...Topic: PIIGS (European debt crisis) 吳宇綸D0131292 劉昱顯D0131156 王謙 周雋彥D0125599 Contents 1. Introduction 2. Overview of the European sovereign debt problem 3. Relief measures of the European sovereign debt crisis 4. European debt crisis 5. Conclusion 6. References I. Introduction The PIIGS is a group that composed of five countries that have some commonality in location and economic environments. In this case, PIIGS includes Portugal, Italy, Ireland, Greece and Spain. The countries which be mentioned are all part of European Union members and have been noted for having weak economics and bad situation of financial problems. In 2008, economic crisis came to all over the world, during the worldwide economic crisis, Portugal, Italy, Ireland, Greece and Spain began to come out the grave and serious concern in the European Union refer to the enormous amount of sovereign debt that they were carrying. The problem with the PIIGS is that speculators dropped, compounding their debt issues and the situation might be much more worse. Many European Union members were also unwilling to rescue these struggling nations although when it became very clear that assistance would be needed. The sovereign debt crisis sparked a number of conversations about reforming financial policy in the European Union to prevent similar problems in the future. The members of PIIGS felt displeasure at the negative allusions and some have...
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