The Financial Crisis Of 2008 Deregulation And Corruption

The Financial Crisis of 2008: Deregulation Corruption There has been a debate for years on what caused the Financial Crisis in 2008 and if there was one main cause, or a series of unfortunate events that led to the crisis. The crisis began when the market was no longer funding many financial entities. The Federal Reserve then lowered the federal funds rate from 5.25% to almost zero percent in December 2008. The Federal Government realized that this was not enough and decided to bail out Bear Stearns, which inhibited JP Morgan Chase to buy Bear Stearns. Unfortunately Bear Stearns was not the only financial entity that needed saving, Lehman Brothers needed help as well. Lehman Brothers was twice the size of Bear Stearns and the government could not bail them out. Lehman Brothers declared bankruptcy on September 15, 2008. Lehman Brothers bankruptcy caused the market tensions to become disastrous. The Fed then had to bail out American International Group the day after Lehman Brothers failed (Poole, 2010). Some blame poor policy making and o thers blame the government. The main causes of the financial crisis are the deregulation of banks and bank corruption. Discussion Deregulation is believed to be one of the major factors that led to the 2008 Financial Crisis. Deregulation refers to the reduction of governmental influence in an industry in order to create more competition (â€Å"Deregulation†, 2015). The reduction in government influence creates a more competitive market thatShow MoreRelatedFinancial Crisis And Its Effects On The Economy Essay1593 Words   |  7 PagesMillions of jobs and careers lost, $20 trillion down the drain, our once stable economic becomes one that is taken over by systemic corruption; the livelihood of people worldwide is now in the hands of five investment banks, two financial conglomerates, three insurance companies, and three rating agencies. Furthermore, all of these companies are working hand-and-hand, as a team, whose main goal is to increase their personal bank accounts, which are located in banks overseas, at the risk of theirRead MoreInside Job Analysis742 Words   |  3 Pagesin the global financial cr isis â€Å"Inside Job† has identified two main themes that have been typically responsible for the financial crisis of 2008. Firstly, extensive deregulation since 1980s has been largely responsible. Secondly, the academia has played a pivotal role in legitimizing deregulation and has hence been indirectly, if not directly, responsible for the one of history’s biggest financial meltdowns. As far as deregulation is concerned, it affected the global financial system in a veryRead MoreInside Job Movie Review1111 Words   |  5 Pagesconsequences of the global financial crisis of 2008. This movie is basically related to recession that was caused by the inefficiency of the industry and the unfavourable banking practices. The director has conducted several interviews and has exposed some hidden realities. The movie clearly shows that this crisis was not accidental, and that there were many people, including regulators, politicians, businessmen, who were actively involved in this destruction. These people and large financial institutions knewRead MoreInside Job Documentary1430 Words   |  6 Pagesvery good job of explaining what happened in a relatively short period of time and in an accessible way. The film also has compelling villains and outrageous behavior that is bound to engage and enrage viewers. It s basically an overview of the financial crisis of recent years, which we are still recovering from. The thesis seems to be that the regulations that were put in place after the Great Depression have been systematically dismantled since the Reagan years (powered by Wall Street lobbyists) whichRead MoreUnethical Behaviors And Roles Of The Top Financial1623 Words   |  7 PagesAbstract This paper explores the unethical behaviors and roles of the top financial executive’s in house market crash. In 2008, a financial crash down landed at front door of every United States citizens. Bankruptcy of big financial institutions, stock and house markets crashed. These aspects contributed to a global economic financial crisis. This paper hypothesizes that it is the manner in which the top financial executives used greed and fraud to run the United Sates that led the country into aRead MoreMAnagement 131254 Words   |  6 Pages M56 â€Å"Inside Job†   Ã¢â‚¬ Inside Job† provides a comprehensive analysis of the global financial crisis of 2008, which at a cost over $20 trillion, caused millions of people to lose their jobs and homes in the worst recession since the Great Depression, and nearly resulted in a global financial collapse. Through exhaustive research and extensive interviews with key financial insiders, politicians, journalists, and academics, the film traces the rise of a rogue industry which hasRead MoreThe Financial And Political Systems Have Always Played1226 Words   |  5 PagesThe financial and political systems have always played a major role in stabilizing the society and ensuring a smooth transition between public policies and economic activities. Over the past decades, we’ve witnessed the global crisis of 2008, which costs â€Å"tens of millions of people their savings, their jobs, and their homes†. Interestingly, the root of the problem comes from the corruption of the financial indust ry and how the political figures respond to the crisis. This response paper correspondsRead MoreFinancial Crisis And Its Effect On The Stock Crisis1155 Words   |  5 PagesBACKGROUND: The Global Financial crisis started with the burst of US housing bubble, which peaked in 2006. The main reason for this was the subprime lending, deregulation of the financial sector, off book financing and underwriting practices. Loans were issued to the customers with poor credit rating thinking that the price of houses will rise in the future and due to overvaluation. This resulted in decline in credit availability, damaged investor faith, and reduced international trade and an impactRead MoreInside Job Analytical Report3567 Words   |  15 PagesWas the 2008 MELTDOWN avoidable? Memorandum of Transmittal To: Sir Azmat Ahmad Ansari From: Syeda Benazir Burhan Date: 28/2/2013 Subject: Analytical Report on the Documentary Inside Job In response to your request of 14/2/2013, I have analyzed the documentary Inside job. Im pleased to present enclosed report, which summarizes the financial break down in the year 2008, described in the documentary. Based on my analysis, the subject of Inside Job is the global financial crisis of 2008. It featuresRead MoreWater Scarcity: Privatization is Not the Solution Essay1061 Words   |  5 Pagesresource. However, this apparent solution is encouraging the problem due to the inefficiency and corruption of these companies. That is why the purpose of this paper, before all else, will be to analyse the diverse complications that water supplies encounter and lastly to see how water privatisation is an unsuccessful reaction to these obstacles. Among these difficulties, which are stimulating the crisis, there are three predominant factors: a negligent use of water, a dramatic increment in the population