Global Financial Crisis comparative Study of the U.K and Developing Countries - Free Essay Example

Sample details Pages: 7 Words: 2089 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? Global Financial Crisis: comparative Study of the U.Kand Developing Countries Introduction The recent global financial crisis represents the first major financial crisis in the 21st century. According to Reinhart and Rogoff (2008:2) the crisis involves à ¢Ã¢â€š ¬Ã…“esoteric instrumentsà ¢Ã¢â€š ¬Ã‚ , à ¢Ã¢â€š ¬Ã…“unaware regulatorsà ¢Ã¢â€š ¬Ã‚  and à ¢Ã¢â€š ¬Ã…“skittish investorsà ¢Ã¢â€š ¬Ã‚ . The crisis began in the United States of America in the summer of 2007 when the U.S and global financial markets found themselves facing a financial crisis and the U.S Federal Reserve System à ¢Ã¢â€š ¬Ã¢â‚¬Å" The Fed found itself in difficulties. (Cecchetti, 2008). Although the crisis began in the United States, virtually every country in the world has witnessed some share of the effects of the crisis as a result of the vast trade and economic relationship between the United States and the rest of the world. For example, a World Bank Working Paper by Ravillon (2008) suggests that the crisis could soon reach à ¢Ã¢â€š ¬Ã…“deeply into the lives of many of the four fift hs of humanity in developing countriesà ¢Ã¢â€š ¬Ã‚ . However, it is not the interest of this paper to study how the crisis has affected every country of the world. This paperà ¢Ã¢â€š ¬Ã¢â€ž ¢s main objective is to understand how the crisis has affected the U.Kà ¢Ã¢â€š ¬Ã¢â€ž ¢s economy highlighting the main industries that have been hard hit by the crisis. It should be noted that the U.K economy is highly correlated with the U.S economy which indicates that the least shock on the U.S economy is likely to have an equal shock on the U.K economy transmitted through contagion. As a result we expect the U.K economy to have been significantly affected by the crisis. The rest of the paper is organised as follows: section 2 looks at the main industry sectors in the U.K that have been affected by the crisis; section 3 provides suggestions on the course of action available in macroeconomy policy terms to U.K policy makers; section 4 highlights aspects of the crisis that suggest market fai lure; section 5 provides comparisons of the crisis in the U.K and two developing countries; section 6 looks at why developing countries are more vulnerable to the effects of the crisis as well as what can be done to reduce their vulnerability in the short- and long-run; and finally section 7 looks at how the IMF, World Bank, U.N and other similar institutions can help developing countries out of the crisis. Don’t waste time! Our writers will create an original "Global Financial Crisis: comparative Study of the U.K and Developing Countries" essay for you Create order Impact of the Financial Crisis on the U.K Economy. As earlier mentioned above, the world witnessed significant crisis recently. The crisis have been mainly because of falling house prices. The main industries that have suffered from the crisis in the U.K include the Financial Services Industry, the Retail Industry and the Automobile Industry. To understand how the Financial Services Industry suffered, we would look at the case of Northern Rock and Bradford and Bingley, two Financial Institutions that were nationalised by the U.K government as a result of the crisis. Keasy and Veronesi (2008) suggest that NR has been the most obvious victim of the changes which have taken place in the financial system over the past 20 years. Northern Rock was one of the U.K highest Mortgage lender. It invested heavily on mortgages originated from the U.S. Northern suffered so much because it ran short of liquidity which came as a result of the fact that it had made a significant number of mortgage loans to borrowers who could not repay. On the contrar y depositors needed repayment of their deposits. Northern Rockà ¢Ã¢â€š ¬Ã¢â€ž ¢s difficulties were exposed because it approached the Central Bank (the Bank of England for a Loan). As a result, many depositors began demanding their deposits from Northern Rock and the Bank witnessed a Bank Run. (Keasey and Veronesi, 2008; Hall, 2008). Keasey and Veronesi (2008) suggest that the risks faced by banks depend on the quality of the lending and whether they have retained sufficient funds to meet the demands of depositors. In the event where depositors have confidence in the bank, the bank does not need to retain enough funds to meet demand deposits. On the contrary in the event were depositors lose confidence in a bank, the bank may have to retain 100 percent of deposits in cash to meet the demands of depositors. This is exactly what happened to Northern Rock. Its inability to meet its liquidity requirements landed it into trouble. Like Northern Rock, Bradford and Bingley invested heavily in sub-prime mortgage loans with less hopes that the loans would ever be repaid. It was also unable to meet the demands of depositors and as such also witnessed a bank run. (Adams, 2008). The Retail Industry has also suffered because it has been unable to get credit from banks. Despite a bailout by the government, banks have become more and more afraid to provide credit to businesses. As a result the retail industry has been witnessing a liquidity squeeze. Retail Giants like Woolworths have been forced into administration as a result of the crisis. In Like manner the Automobile Industry has been unable to make sales because banks are no longer willing to provide car loans. Automobile plants such as those of Vauxhaul and Land Rover have been forced to suspend operations for some time. One can see that the international financial crisis is really having a significant impact on the U.K economy. Macroeconomic Tools Available The macroeconomic tools available to policy makers in these circumstances include fiscal and monetary policy. As far as monetary policy is concerned, the government needs to devise means of increasing the supply of money in the economy so as to reduce the liquidity squeeze. The policy tools in this case include the purchase of bonds in the open market by the Bank of England, the provision of loans to banks by the Bank of England (in its function as a lender of last resort). Fiscal Policy measures include reducing taxes, increasing government spending, etc. The U.K government has already done much to increase liquidity in the economy. On the 9th of October 2008, the government announced a bailout package of  £500billion to major banks in the U.K. (Winnett and Porter, 2008). In addition, the Bank of England on Thursday 8th January 2009 reduced the bank rate (the interbank lending rate) by 50 basis points from 2 percent to 1.5 percent in a bid to mitigate the recession. (Watts, 2 009). There are also speculations that the central bank and British government may soon feel compelled to undertake a range of extraordinary measures such as figuratively printing money in an effort to stave off the threat of deflation. (Watts, 2009). Aspects of the Crisis that Suggest Market Failure. The aspects of the crisis that suggest market failure are numerous. Firstly, banks were unable to determine that the mortgage loans will not perform well. Moreover, credit rating agencies seem to have rated most of the mortgaged backed securities (MBS) as being of high credit rating and thus made it difficult for banks to detect the inherent default in them. In addition, the regulators failed to regulate the Financial Services Industry properly to ensure that firms in the industry do not involve in too much risk taking. Even when there were signs of a crisis, the Bank of England and the FSA failed to act fast enough to bail Northern Rock out. They allowed the matter to escalate to a point were the bank had to witness a bank run. As earlier mentioned in the introduction Reinhart and Rogoff (2008:2) the crisis involves à ¢Ã¢â€š ¬Ã…“esoteric instrumentsà ¢Ã¢â€š ¬Ã‚ , à ¢Ã¢â€š ¬Ã…“unaware regulatorsà ¢Ã¢â€š ¬Ã‚  and à ¢Ã¢â€š ¬Ã…“skittish investorsà ¢Ã¢â€š ¬Ã‚ . Esoteric he re indicates that complex financial instruments were created. The risk of these instruments was difficult o determine. Regulators were also unaware of the risks inherent in these instruments and investors lose confidence in the market. Comparison of the Crisis in The U.K and Cameroon/Zambia. The main impact of the crisis on Cameroon is the fact that the demand for exports has began to drop. Cameroon depends a lot on the export of raw materials including timber, rubber, banana etc. There are reports that the timber sector in Cameroon is already facing difficulties. Many contracts to supply timber to a number of European countries have been cancelled and approximately 10,000 workers have been temporarily sent on technical leave. (Nyuylime, 2008). The main difference between Cameroon and the U.K is that Cameroon is still practicing traditional banking policies. Loans are only provided to borrowers who can pay. In addition, the banking system as well as the financial system still remains underdeveloped. So-called esoteric securities are not yet present in the system. Thus, banks in Cameroon are not exposed to the same type of risks that financial institutions in the U.K are exposed to. However, because of Cameroonà ¢Ã¢â€š ¬Ã¢â€ž ¢s dependence on exports of raw materials to European countries that currently face significant financial problems; it could not be left out of the crisis completely. The direct impact of the crisis on Zambia have also be limited. Zambia relies mostly on domestic funding and it has a limited exposure to external lines of credit. Like Cameroon, the main impact has been on exports. Global copper prices have dropped sharply and because copper accounts for a high portion of Zambiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s exports, Zambiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s currency has witnessed a significant deterioration of its currency. (Revilla, 2008). The governmentà ¢Ã¢â€š ¬Ã¢â€ž ¢s fiscal position has weakened because it depends heavily on increased tax revenues. (Revilla, 2008). How developing Countries can Limit Their exposure to Crisis. Developing countries can reduce their exposure to such crisis in the future by reducing their dependence on the export of raw materials. What developing countries can do is to encourage inward foreign direct investment (FDI) into its manufacturing sector that will enable them transform their raw materials themselves. Developing continue to export raw materials at very cheap prices and buy capital goods from Europe at far more expensive rates. By so doing, they will be able to reduce their exposure to external shocks in both the short- and long-run. The Role of the IMF, World Bank and U.N. The IMF and the World Bank can help developing countries by providing them with loans that will help improve on their manufacturing sector. In addition, they need to help developing countries improve on their infrastructure, transport networks and education. They can also help developing countries improve on their financial systems and macroeconomic policies. These are the factors that help in attracting foreign direct investment to the manufacturing sector in particular. By so doing, developing countries can reduce their dependence on export of raw materials. They will rather be transforming the raw materials themselves and their European counterparts will have less power to determine prices for them. This is because falling supply of raw materials will bid up prices. Another problem with developing countries is that they are characterised with a lot of conflicts that need to be resolved. In Africa for example, there is no democracy and the few countries that claim to be practicing democracy are still far from embracing true democracy. The lack of good political structures is hampering the development of sound macroeconomic policies. The U.N needs to play a more influential role to reduce conflicts in developing countries and to install concrete democratic structures in these countries. BIBLIOGRAPHY Adams, M. (2008). What Bradford Bingley Will Cost Us. Available online at: https://money.sky.com/money/recession/bradford_bingley_public_cost.html Cecchetti, S. G. (2008). Crisis And Responses: The Federal Reserve And The Financial Crisis Of 2007-2008. Working Paper 14134, NATIONAL BUREAU OF ECONOMIC RESEARCH, 1050 Massachusetts Avenue Cambridge, MA 02138 https://www.nber.org/papers/w14134 Keasey, K., Veronesi G. (2008). Lessons from the Northern Rock affair Journal of Financial Regulation and Compliance; Volume: 16; Issue: 1 Hall, M. J.B. (2008)The sub-prime crisis, the credit queeze and Northern Rock: the lessons to be learned Journal of Financial Regulation and Compliance; Volume: 16; Issue: 1; Nyuylime, L. P. (2008). Cameroon: Global Financial Crisis à ¢Ã¢â€š ¬Ã¢â‚¬Å" Cameroon. Available online at: https://allafrica.com/stories/200810210847.html Ravallion, M. (2008). Bailing out the Worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Poorest. Policy Research Working Paper No. 4763. The World Bank Development Research Group. Reinhart, C. M., Rogoff, K. S. (2008). Is the 2007 U.S. Sub-prime financial crisis so different? An International Historical comparison. Working Paper 13761 National Bureau Of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138: https://www.nber.org/papers/w13761 Revilla, J. (2008). Impact of the Global Financial Crisis on Zambia. Available online at: https://africacan.worldbank.org/impact-of-the-global-financial-crisis-on-zambia. Watts, W. (2009). Key British interest rate cut to all-time low. Available online at: https://www.marketwatch.com/News/Story/Story.aspx?guid=%7BF64C219E%2D1B59%2D43D9%2D954C%2D4303F2645C30%7D

Uncommon Article Gives You the Facts on College Paper That Only a Few People Know Exist

Uncommon Article Gives You the Facts on College Paper That Only a Few People Know Exist Writing is a present that comes naturally. All writing topics are sure to be quality writing. In fact, the majority of it is composed of writing. Paper writing services reviews should always provide you details about the characteristic of the writers, as you'll need to understand what sorts of people will be working on the next project. Now you can purchase genuine college essay online, one that is going to fit your financial plan and get your work done also. The actual folks highly praise our essay help site. A whole lot of students will need to boost their writing skills and vocabulary to compose excellent papers. You may then review the work and get it amended if you observe any tiny difficulties. A hunt for decent paper writing services can be rough, especially if you're stuck in a creative rut and cannot finish the tasks punctually. If you've great abilities, you're on the right path towards landing an excellent job. As you hone your analytical abilities, it gets easier to apply the exact same skills to other facets of life. The process of producing an expert paper has begun. A significant part custom paper wri ting service reviews is the emphasis that's put on the caliber of the customer support. You may get the maximum superior nursing paper writing services at our website. As a result, paper writing service online bureaus are happy to work with each other to help you accomplish your desirable academic aims in an acceptable price tag. Finding the Best College Paper In case you would enjoy the best research paper writing available on the internet, you use us entirely. The type of essay you're looking for will be provided to you within the deadline offered to you. It's possible to speak about your goals for writing the given paper and the way that it will be significant for society too. In order to produce students understood about different topics of the syllabus, they are requested to compose a research paper on them. Writing an outline is among the most significant areas of the paper, as without it, your paper won't have a suitable structure. Regardless of what genre you would like Business Studies, Microeconomics, Business Management and Financial Accounting, we're here to serve your requirements. With a fantastic outline, you experience a chance to develop each section of the paper properly. Writing a great paper requires a lot of time and energy. The Downside Risk of College Paper At length, faculty paper writing help is the most vital portion of college paper writing. Contrary to what most people think, many professors are extremely reasonable, and many have handed in a late paper from time-to-time. Elect for our professional services and additionally you don't have to get concerned with a different college papers again. Your newspaper should be succinct and arranged. The cover of a university newspaper includes a blackface cartoon. College Paper: the Ultimate Convenience! Writing an essay for a student at an American University is something that's treated with fantastic importance by an entire bunch of people which were also told to compose essays as students. If it's so, then you might be having some challenging time for a student together with being a writer. College isn't as easy as people think that it is, thus, knowing all the tools which are available and making the most out of them is the bright decision that could lead you to success. Unfortunately, students may not acknowledge or take action on the warning signs since they feel it is an indication of weakness. College Paper Explained Finding the most suitable job for a college student is even more challenging. Moreover, a college student job salary isn't much. As a student, you might fear seeking paper help presuming it's illegal. If you're a student, you're probably acquainted with the strain of submitting a college paper. So should you need to employ college essay writer online, we're just the people that you will need to contact. Yes, there's an issue with racism at SUNY Plattsburgh. Writing a college essay isn't only a daunting but likewise an infuriating job for students. Besides freshmen, there are particular college essays which will pose plenty of problem for students.

Mbuti Culture Free Essays

Mbuti Culture Micheal Smith ANT 101 Prof. Tracy Samperio September 24, 2012 Mbuti Culture Mbuti primary mode of subsistence is Foraging. A forager lives as hunter and gatherer. We will write a custom essay sample on Mbuti Culture or any similar topic only for you Order Now The Mbuti hunt and gather food from the forest, and they trade as well for survival. They are referred as hunter-gatherer. They are a small band of kinship groups that are mobile. All foraging communities value their lifestyle. The Mbuti show how their kinships, beliefs and values, and economic organization are the key for their forager culture. In the forager societies kinship is one of the key importance of the lifestyle. Mbuti are called the people of the forest, who believe they are the children of the forest. Their beliefs and values are very important to their culture also. The forager beliefs are that every living thing has a spirit (Nowak and Laird, 2010). The Mbuti beliefs are that the forest is for helping and giving thanks through their ritual ceremonies ( Mosko, pg. 897). Forager see working together and sharing is the way to economic organization. The Mbuti has the same way to keep their economic organization working right. The Mbuti way of living shows team work instead of individual wealth. The foraging societies believe family, marriage and kinship, gender, and age are the key principle of social organization (Nowak and Laird, 2010). The Mbuti are forest people. Their kinship is small and have different one throughout their band. They look to choose a partner, than start a family. The most common type of family in foraging societies is nuclear family (Nowak and Laird, 2010), which the Mbuti have also. In choosing a partner, there are some rules and understanding they have to meet. With the foraging societies, choosing a partner, they have to understand; they cannot have sexual intercourse until married and cannot arry within certain kin. That means intermediate family. Once the Mbuti culture has chosen a partner and got marry; sexual intercourse can occur also. Ideally, marital love-making should take place in the forest, but it may also occur in the couple own hut (Mosko, pg. 899). The women that is married should have intercourse during menstruate cycle. This is how they conceive and start a family. The Mbuti common type of family is the nuclear family, just like most foraging societies. A nuclear family is composed of a mother and father and their children (Nowak and Laird, 2010). The forager societies feel nuclear family adaptive to various situations that is why it is common (Nowak and Laird, 2010). The Mbuti are composed of bands which are multifamily groups. The bands are small groups of nuclear family, which changes every time they move. Sometime the bands are composed of a few extended families, each consisting of a nuclear family with married children, their spouses, and offspring (Nowak and Laird, 2010). Such a band composition works best in terms of cooperation and sharing (Nowak and Laird, 2010). The Mbuti bands establish a camp in the forest. The nuclear families of the bands arrange their separate huts roughly in a circle around a central hearth (Mosko, pg. 903). The bands are what make up the Mbuti kinship. The forager society’s beliefs and values may be different but have the same meaning. Like stated before, they believe that every living thing has a spirit (Nowak and Laird, 2010). The Mbuti main beliefs and values are the forest, avoiding violence, and their leisure time. The Mbuti see the forest as a symbol of their beliefs and values. The forest is a thing that has a spirit which helps them. They give thanks to the forest by ritual ceremonies. The forest also plays an important part in the Mbuti pregnancy. â€Å"Forest† itself, for virtually everything in Mbuti culture is related to the one idea (Mosko, pg. 897). The Mbuti do not believe the forest is a simple idea; they describe it as â€Å"lover†, â€Å"God of the Hunt†, and â€Å"God of the Forest†, for some examples (Mosko, pg. 897). The forest is what the Mbuti base their lifestyles on. Foraging Societies try to avoid violence by working hard and dealing with other cultures like them. They work hard to feed their families. They value the idea of a family and working together. That is why their leisure time is so important. Leisure time is used to spend time with the kin and friends, the foraging societies believe (Nowak and Laird, 2010). They work hard to find food and hunt for a couple of days and rest of the time is for leisure activities. The Mbuti have ritual that they do during their leisure time. They have a ceremony called molimo. It is performed by the men and is associated with singing and the use of a trumpet called the molimo (Nowak and Laird, 2010). The molimo ceremony used the molimo, a strictly forest institution, which young men are initiated after they have become successful hunters (Lee, pg. 44). This is how most of the leisure time goes to, the family. The forager culture has high value for working together and sharing (Nowak and Laird, 2010). Those values show how their economic organization works wells. They see economic importance as cultural tradition. This is how they survive also. It is easy for forager to move place to place because they don’t have many material items. T hat is what makes the exchange process so easy also. The reciprocal economic systems are a form of exchange of goods and services that occurs between members of a kinship group (Nowak and Laird, 2010). Foraging societies has a similar way of using this system. The amount of food and other resources occur immediately because they are mobile (Nowak and Laird, 2010). The exchange process is what keeps them going. Even though they are mobile, they can use the environment to storage material. The Mbuti are forager and show most of the forager society’s way of living. The Mbuti has showed how their kinships, beliefs and values, and economic organization is the key for their forager culture. Reference Nowak, B. Laird, P. (2010). Cultural Anthropology. Bridgepoint education, Inc. Retrieved from: http://content. ashford. edu The Symbols of â€Å"Forest†: A Structural Analysis of Mbuti Culture and Social Organization Mark S. Mosko American Anthropologist , New Series, Vol. 89, No. 4 (Dec. , 1987), pp. 896-913 Published by: Wiley-Blackwell on behalf of the American Anthropological Association Article Stable URL: http://www. jstor. org/stable/677863 The Mbuti Pygmies: An Ethnographic Survey by Colin M. Turnbull Review by: Richard B. Lee American Anthropologist , New Series, Vol. 69, No. 2 (Apr. , 1967), pp. 243-244 Published by: Wiley-Blackwell on behalf of the American Anthropological Association Article Stable URL: http://www. jstor. org/stable/669466 How to cite Mbuti Culture, Essay examples