...www.capitalvia.com Global Research Limited IMPACT of GREECE White Paper - Impact of Greece Crisis Global Research Limited Introduction Historically, financial crisis tend to lead to sharp economic downturns, low government revenues, widening government deficits, high levels of debt, pushing many governments into defaults. This is called SOVEREGIN DEBT CRISIS. GREECE is currently facing this, it accumulated high levels of debt during the decade before the crisis, when capital markets were highly liquid. As the crisis has unfolded and there was liquidity crunch in world economy, Greece may no longer be able to rol over its maturing debt obligations. Build – Up To The Current Crisis Between 2001-2008, Greece reported budget deficits averaged 5% per year, compared to Eurozone average of 2%. Also, its current account deficits averaged to 9% per year compared to Eurozone average of 1% Greece funded these twin deficits by borrowing in international capital markets, leaving it with chronically high external debt (115% of GDP in 2009) Some of the facts which can be depicted from following charts : www.capitalvia.com 2 White Paper - Impact of Greece Crisis Global Research Limited How Country Debts And Budget Deficits Compare? Projected budget deficit for 2009 Budget deficit figs as % of GDP Debt as % of GDP UK 13% Greece 12.5% Spain 11.25% Ireland 54.3% 68.6% 112.6% 65.8% 10.75% 114.6% 5.3% Italy Germany 3.5% 74.3% Source:...
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...www.capitalvia.com G lobal Research Limited I MPACT of G REECE White Paper - Impact of Greece Crisis Global Research Limited Introduction Historically, financial crisis tend to lead to sharp economic downturns, low government revenues, widening government deficits, high levels of debt, pushing many governments into defaults. This is called SOVEREGIN DEBT CRISIS. GREECE is currently facing this, it accumulated high levels of debt during the decade before the crisis, when capital markets were highly liquid. As the crisis has unfolded and there was liquidity crunch in world economy, Greece may no longer be able to rol over its maturing debt obligations. Build – Up To The Current Crisis Between 2001-2008, Greece reported budget deficits averaged 5% per year, compared to Eurozone average of 2%. Also, its current account deficits averaged to 9% per year compared to Eurozone average of 1% Greece funded these twin deficits by borrowing in international capital markets, leaving it with chronically high external debt (115% of GDP in 2009) Some of the facts which can be depicted from following charts : www.capitalvia.com 2 White Paper - Impact of Greece Crisis G lobal Research Limited How Country Debts And Budget Deficits Compare? Projected budget deficit for 2009 Budget deficit figs as % of GDP Debt as % of GDP 68.6% UK 13% 112.6% Greece 12.5% 54.3% Spain 11.25% 65.8% Ireland 10.75% 114.6% Italy ...
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...Why did China fare much better than the United States and the United Kingdom during the 2007-2009 financial crisis ? 1. Global financial crisis 2007 to 2009 1.1 Background The 2007-2009 financial crisis started as a sub-prime crisis in the United States (US). The Wall Street, driven for higher profits and low federal fund rate in home ownership began lending to sub-primes (Whalley et al, 2009). The mortgage loans were then re-packaged into financial instruments and sold to investors globally. When the housing prices declined in 2006, sub-primes defaulted on their mortgage loans as the values of their houses depreciated. These non-performing loans grew in sizes and led to the collapse of the mortgage loan market and collateralised debt obligations, leaving banks and financial institutions with lower net worth (Bianco, 2008). Due to the interconnected economies, the impact of the crisis spread beyond the US and resulted in a global financial crisis. | | | 1. | | | 2. | | | 3. | | | 4. | | | 5. | | | | | | | | | | 1. | | | | | | | 1. | | | 2. | | | 3. | | | | | | GDP: GDP growth (%): Considering that China’s GDP was only a third of the USA’s, its fiscal stimulus package size was significant in comparison to USA and UK, where the stimulus package were only 6% and 1.4% of their respective GDP (Fleet, 2010).. Hu Jintao committed at the G20...
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...Current financial crisis Economic growth involves metamorphosis of the financial system. Forms of banks and bank money change. These changes, if not addressed, leave the banking system vulnerable to crisis. There is no greater challenge in economics than to understand and prevent financial crises. The financial crisis of 2007-2008 provides the opportunity to reassess our understanding of crises. All financial crises are at root bank runs, because bank debt—of all forms—is vulnerable to sudden exit by bank debt holders. The current crisis raises issues for crisis theory. And, empirically, studying crises is challenging because of small samples and incomplete data. *Written as a contribution for Trade, Globalization and Development: Essays in Honor of Kalyan Sanyal, edited by Sugata Marjit and Rajat Acharya (Springer Verlag; forthcoming). Some of this essay draws from material in my book Misunderstanding Financial Crises (Oxford University Press; forthcoming November 2012). I worked at AIG Financial Products as a consultant from 1996-2008. I thank Doug Diamond, Bengt Holmström, Arvind Krishnamurthy, and Guillermo Ordoňez for comments.1 1. Introduction Economic development does not result in the elimination of financial crises. The recent financial crisis of 2007-2009 in the United States and Europe shows that market economies, however much they grow and change, are still susceptible to collapse or near-collapse from financial crisis. This is a staggering thought...
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...WP/13/266 Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten Carmen M. Reinhart and Kenneth S. Rogoff WP/13/266 © 2013 International Monetary Fund IMF Working Paper Research Department Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten1 Prepared by Carmen M. Reinhart and Kenneth S. Rogoff Authorized for distribution by Stijn Claessens December 2013 This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. Abstract Even after one of the most severe multi-year crises on record in the advanced economies, the received wisdom in policy circles clings to the notion that high-income countries are completely different from their emerging market counterparts. The current phase of the official policy approach is predicated on the assumption that debt sustainability can be achieved through a mix of austerity, forbearance and growth. The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression. As we document, this claim is at odds with the historical track record of...
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...Order Title Name Institution Course Date Crisis plan Hurricane Katrina was considered as one of the most destructive disaster in the history of the U.S. The extent of damage and level of response during the occurrence of the crisis was a clear indication, that the government lacked management plans and procedures needed to mitigate the outcome. One of the plans that were put into action in the state of Mississippi was the use of the National Guard to enhance relief operations. This was part of the overall plan, the “National Response plan” (Dudley, 2006). This paper aims at evaluating strategies and situations during the occurrence of the Hurricane Katrina Natural Disaster. By so doing, workable strategies are highlighted and the reasons behind their use supported with due consideration to resource availability. The paper further presents an analysis of the Mississippi crisis plan whileexplaining the efficacy of elements selected for the “National Response Plan” consequently stating how the plan could be relevant in either Louisiana or Alabama.The paper summarizes by presenting missing elements. From the journal ‘After Katrina: Building back better than ever’ which is a report by James Barksdale who is the Chairman of the Governor’s Commission on Recovery, Building and Renewal, it is made rife that the ‘National Response Plan’ (NRP) was a workable strategy that provided a big boost to the disaster management efforts made by the American government (Governor's Commission on Recovery...
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...Can innovation solve the economic crisis? Loh Hu 2/18/2013 In this paper, I examine how the theory of technological innovation waves could contribute to solving the ongoing economic crisis. Primarily, my stance remains that innovation in itself is insufficient to solve the economic crisis unless there exists a matching techno-economic paradigm where national, supranational and global efforts are coordinated for a full deployment of technological revolution. Can innovation solve the economic crisis? Background There has been a wide international debate on the causes and possible solutions to the economic crisis that emerged in 2007 – 2008 (Ranga and Etzkowitz 2012). The economic crisis sweeps across the global financial system rapidly and furiously as markets are globally integrated (Gore 2010). Hence, the responses to the global economic crisis are not only enclosed within a nation’s or a coalition government’s approach. Rather, a global coordinated response is warranted as well. Economic stimulus packages addressing short-term and long-term problems have been adopted in most countries as well as the European Commission (Ranga and Etzkowitz 2012). Internationally, the United States of America and European Union have recently been discussing on a free-trade agreement to remove trading barriers between the two important economic powers and boost the economies (BBC News Business 2013). Globally, the G-20 group of major economies have considered proposals on international...
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...key amplifier during financial crisis and often acts as a contagion, spreading illiquidity problems to firms in similar industries (Caballero 2009). In the 2008 crisis, large losses for a bank would force this bank to sell assets at distressed prices. This process would force other banks to re-value the same assets at a lower price and would cause them to sell these assets and prices below fundamental value, incurring losses (French 2010). “Compared to non-bank, bank failure contagion [as a result of distressed sales] appears faster; is more likely to spread to a larger proportion of the industry; is likely to lead to a larger percentage of failures, and is more likely to spill over to other sectors”(Kaufman 1994). Fire sales typically occur in a single firm and then the decreased liquidity cascades to other firms in the same industry. In the case of financial institutions, fire sales often spread to other sectors of the economy as well. Fire sales can be thought of as positive feedback loops; financial distress forces firms to sell assets, which causes the prices of these assets to depreciate. This process leads to increased financial distress (Shleifer 2011). In this way, fire sales can depreciate asset prices and decrease economy-wide liquidity to the point of having a significant negative effect on an economy. Macroeconomic Effects The literature discussing the negative macroeconomic effects of fire sales is numerous. Many of these papers quote negative impacts to be...
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...Abstract Lehman collapse was the largest bank bankruptcy in the United States history. Complex causes combination lead to this tragedy. This paper is going to illustrate primary causes that result in its failure, and also discuss impacts on financial systems supervision and regulations. TABLE OF CONTENTS 1. INTRODUCTION 1 2. LITERATURE REVIEW 4 3. RESEARCH METHODOLOGY 1 3.1 Data collection 2 3.2 Methodology x 3.3 Limitations 3 4. ANALYSIS AND DISCUSSION 4 4.1 5 4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 4.2 4.3 6 5. CONCLUSION 1 6. REFERENCES 4 7. APPENDICES 1 8. ACKNOWLEDGEMENTS 1 1. INTRODUCTION The credit crunch occurred in 2008 has been arguably recognised as an extreme phenomenon during the financial crisis, which generated to the longest recession in the U.S. history since ‘the Great Depression’ in1929. Over 600,000 jobs lost in during 2008, and unemployment rate went up to 6.1% which was the highest point in 5-year time (Isidore, 2008). According to the Turner Review (2009), faultiness of regulation and supervision underpinned financial problems’ increase. Therefore, to illustrate the causes of Lehman Bother’s crash in 2008, events occurred during crisis progress are listed in Appendix 1. Among those serious cases, bankruptcy of Lehman Brothers was concerned to be the most typical one to...
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...competitiveness within the post-crisis economy. Causes, evoiutions and possibie innovative soiutions to fight against the undesirable effects of the economic crisis Laura Mariana CISMAÇ West University Timisoara laura.cismas@feaa.uvt.ro Ruxandra Ioana PITORAC West University Timiçoara ruxandrapitorac@gmail.com Abstract. The main objective of this paper is to highlight the need for promoting a new vision regarding competitiveness mostly in the context of amplifying the effects and the complexity of the nature of crisis manifested now on the international level (economic, environment, demographic, value and moral etc.). The economic thinking pays increased attention to the issues related to economic crisis, as well as the development of theories that give satisfactory answers about the causes and, especially, the solutions to the crisis. Using scientific observation and comparative case study as research methods, this paper aims to make a theoretical critical review of the theories regarding the causes of economic crisis over time and to identify and analyze some anti-crisis policies. Keywords: economic competitiveness. crisis; macroeconomic theories; anti-crisis policies; JEL Classification: E30, GOL REL Classification: 81, 8M. 24 Laura Mariana Cisma§, Ruxandra ioana Pitorac Introduction Theoretical controversy on crises has augmented over the last two decades with a special accent on system and stmcture crises, as well as on the crisis of intemational economic relations...
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...1 University of Phoenix HCS 320 Health Care Communication Strategies MU13BHA08 Communication During a Crisis Situation Given the scenario, today as the director of a regional Emergency Management Office, the phone begun to ring more than usual. I had started receiving official reports that the public water supplies of several towns in the area have become contaminated with a life-threatening biological agent. Contingency plans must be addressed within the organization, and with the public without creating a panic. This paper will cover development of a communication plan, and what the communication plan should include. This paper will also cover topics regarding potential advantages, and challenges with communication, communication with the public, and private sector, message mapping, the use of social media, and how media might be used with today’s modern technology. If carefully designed, communication plan can save precious time when an emergency occurs and enable leaders and spokespersons to focus on particulars of the emergency at hand, and the quality, accuracy, and speed of their responses. To show the context of messaging as part of the overall plan, the following describes what a comprehensive communication plan should include. • Describe and designate staff roles and responsibilities for different emergency scenarios • Designate who is accountable for leading the response • Designate who is responsible for implementing various actions ...
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...NBER WORKING PAPER SERIES THE FINANCIAL CRISIS AND THE POLICY RESPONSES: AN EMPIRICAL ANALYSIS OF WHAT WENT WRONG John B. Taylor Working Paper 14631 http://www.nber.org/papers/w14631 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 January 2009 I am grateful to John Cogan, Angelo Melino, John Murray, George Shultz and participants in the Global Markets Working Group for helpful comments and suggestions. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2009 by John B. Taylor. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. The Financial Crisis and the Policy Responses: An Empirical Analysis of What Went Wrong John B. Taylor NBER Working Paper No. 14631 January 2009 JEL No. E0,G01 ABSTRACT This paper is an empirical investigation of the role of government actions and interventions in the financial crisis that flared up in August 2007. It integrates and summarizes several ongoing empirical research projects with the aim of learning from past policy. The evidence is presented in a series of charts which are...
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...Essays, Term Papers & Book Notes • Essays • Resource Center I'm Researching... • danielynn31 d… • • • ◦ Back danielynn31 Saved Recents Uploads My Answers ◦ Back ◦ Ask a Question ◦ My Questions ◦ My Answers ◦ Preferences • Account ◦ Back ◦ Account Settings ◦ Profile ◦ Sign Out • • • • • I'm Researching... Products • • • • • Home Research Drive Answers Texty • • • • • Company Legal Site Map Contact Advertise About • • • ©2016 StudyMode.com 1. Home > 2. Debt > 3. Student Loan Crisis... < Back to Debt Student Loan Crisis Research Paper Debt, Education finance, Higher education • • • • By sympathys Jun 11, 2013 1348 Words 220 Views PAGE 1 OF 5 �PAGE � How to Make College More Affordable Many of the protesters occupying Wall Street and other places say they are upset about the rising price of going to college. There is little dispute today that the number of students who have debt has increased, and that the amount of money they have borrowed has gone up (Billitteri). Many students incur large amounts of debt that will never pay dividends in higher wages or greater job satisfaction, and they graduate into a world with weak employment prospects. It's a betrayal of the American social contract that says if you work hard and invest in yourself through education, you'll be able to build a better life. The current system is badly in need of an overhaul, and this paper will present...
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...The latter is the canter of this paper and this incorporates the request by behaviour or activities which result from education; indiscipline means non-attendance or absence of request. Indiscipline can be characterized as the breakdown of good leadership and moral qualities limited by the rule that everyone must follow, however, once ''the thin fine line between'' good and bad is obscured, it is going to affect the nation at large. As indicated by Max, if you ask any Nigerian you will hear complain about Nigeria's corruption of indiscipline, waste, insecurity, corruption and also unreliability and political instability etc. In this perspective of the above improvements today, Nigerians are requesting great leaders that will handle these issues are head-on However any country...
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...O C C A S I O N A L PA P E R S E R I E S N O 1 2 3 / F E B R UA RY 2 011 THE INTERNATIONAL MONETARY SYSTEM AFTER THE FINANCIAL CRISIS by Ettore Dorrucci and Julie McKay OCCASIONAL PAPER SERIES NO 123 / FEBRUARY 2011 THE INTERNATIONAL MONETARY SYSTEM AFTER THE FINANCIAL CRISIS by Ettore Dorrucci and Julie McKay1 NOTE: This Occasional Paper should not be reported as representing the views of the European Central Bank (ECB). The views expressed are those of the authors and do not necessarily reflect those of the ECB. In 2011 all ECB publications feature a motif taken from the €100 banknote. This paper can be downloaded without charge from http://www.ecb.europa.eu or from the Social Science Research Network electronic library at http://ssrn.com/abstract_id=1646277 1 European Central Bank, Ettore.Dorrucci@ecb.europa.eu, Julie.McKay@ecb.europa.eu. The views expressed in this paper do not necessarily reflect those of the European Central Bank. The authors would like to thank, outside their institution, A. Afota, C. Borio, M. Committeri, B. Eichengreen, A. Erce, A. Gastaud, P. L'Hotelleire-Fallois Armas, P. Moreno, P. Sedlacek, Z. Szalai, I. Visco and J-P. Yanitch, and, within their institution, R. Beck, T. Bracke, A. Chudik, A. Mehl, E. Mileva, F. Moss, G. Pineau, F. Ramon-Ballester, L. Stracca, R. Straub, and C. Thimann for their very helpful comments and/or inputs. © European Central Bank, 2011 Address Kaiserstrasse 29 60311 Frankfurt am Main, Germany...
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