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Use of Financial Reforms to Prevent Future Financial Crisis

Use of Financial Reforms to Prevent Future Financial Crisis

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Published by Alex
The present research study explores the causes of the recent financial crisis and discusses how the Wall Street reforms can prevent such kind of financial crisis in future. This study also compares the present financial crisis with similar kind of crisis, as that of Great Depression, in American history.
The present financial crisis is considered the worst economic crisis since the Great Depression which has adversely affected the U.S economy. This financial crisis started in U.S.A and then reached to the rest of the world. It was only due to interdependence of the modern global economy that this crisis affected the other countries of the world. Consequently, in U.S.A several major investment banks, investment companies and commercial banks were sold at very cheap prices. Various financial institutions were declared as bankrupt and in such an uncertain environment, they could not survive themselves. Most of the institutions were bailed out with government’s help.

The present crisis started in last quarter of 2007 and surfaced itself in August 2008 when financial giant Bear Stearns & Co. and Leman Brothers, insurance giant American International Group (AIG) and numerous commercial banks collapsed. Such a desperate situation left adverse impact on US economy. People drew their money from banks and lost confidence in them. Due to this financial crisis, a considerable number of people lost their jobs and became worried about their future.
New financial policies and reforms are being enacted to avoid such future economic crisis. US government is trying to prepare such guidelines that help in making sustainable financial developments. Wall Street reforms are considered as a big step in this direction. These reforms aim at regulating the financial institutions in such an effective way that they withstand any financial problem properly. New councils are being established to watch the activities and performance of the banking and non-banking sectors.
Many of our contemporary scholars are also conducting the research works to trace the real causes of present crisis and suggesting effective course of action for government and the policymakers. The research work of these scholars would also help in identifying the shortcomings and loopholes in the financial system. The present financial system can be improved by taking in considerations the solutions given by them.
The present research study explores the causes of the recent financial crisis and discusses how the Wall Street reforms can prevent such kind of financial crisis in future. This study also compares the present financial crisis with similar kind of crisis, as that of Great Depression, in American history.
The present financial crisis is considered the worst economic crisis since the Great Depression which has adversely affected the U.S economy. This financial crisis started in U.S.A and then reached to the rest of the world. It was only due to interdependence of the modern global economy that this crisis affected the other countries of the world. Consequently, in U.S.A several major investment banks, investment companies and commercial banks were sold at very cheap prices. Various financial institutions were declared as bankrupt and in such an uncertain environment, they could not survive themselves. Most of the institutions were bailed out with government’s help.

The present crisis started in last quarter of 2007 and surfaced itself in August 2008 when financial giant Bear Stearns & Co. and Leman Brothers, insurance giant American International Group (AIG) and numerous commercial banks collapsed. Such a desperate situation left adverse impact on US economy. People drew their money from banks and lost confidence in them. Due to this financial crisis, a considerable number of people lost their jobs and became worried about their future.
New financial policies and reforms are being enacted to avoid such future economic crisis. US government is trying to prepare such guidelines that help in making sustainable financial developments. Wall Street reforms are considered as a big step in this direction. These reforms aim at regulating the financial institutions in such an effective way that they withstand any financial problem properly. New councils are being established to watch the activities and performance of the banking and non-banking sectors.
Many of our contemporary scholars are also conducting the research works to trace the real causes of present crisis and suggesting effective course of action for government and the policymakers. The research work of these scholars would also help in identifying the shortcomings and loopholes in the financial system. The present financial system can be improved by taking in considerations the solutions given by them.

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Published by: Alex on Feb 07, 2011
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08/18/2011

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A Revise on the Use of Financial Reforms to Prevent Future Financial Crisis: ACase study of United States of America
 
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Contents1.1 Project Background -------------------------------------------------------------------------------------31.2 Significance of Study -----------------------------------------------------------------------------------31.3 Research Objective--------------------------------------------------------------------------------------41.3 Literature Review----------------------------------------------------------------------------------------51.4 Critical Evaluation of Wall Street Reforms---------------------------------------------------------101.5 Conclusion and Recommendations-------------------------------------------------------------------14Bibliography--------------------------------------------------------------------------------------------------15
 
 
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1.1 Project Background:
T
he present research study explores the causes of the recent financial crisis and discusses howthe Wall Street reforms can prevent such kind of financial crisis in future.
T
his study alsocompares the present financial crisis with similar kind of crisis, as that of Great Depression, inAmerican history.
T
he present financial crisis is considered the worst economic crisis since the Great Depressionwhich has adversely affected the U.S economy.
T
his financial crisis started in U.S.A and thenreached to the rest of the world. It was only due to interdependence of the modern globaleconomy that this crisis affected the other countries of the world. Consequently, in U.S.A severalmajor investment banks, investment companies and commercial banks were sold at very cheap prices. Various financial institutions were declared as bankrupt and in such an uncertainenvironment, they could not survive themselves. Most of the institutions were bailed out withgovernment¶s help.
T
he present crisis started in last quarter of 2007 and surfaced itself in August 2008 whenfinancial giant Bear Stearns & Co. and Leman Brothers, insurance giant American InternationalGroup (AIG) and numerous commercial banks collapsed. Such a desperate situation left adverseimpact on US economy. People drew their money from banks and lost confidence in them. Dueto this financial crisis, a considerable number of people lost their jobs and became worried abouttheir future. New financial policies and reforms are being enacted to avoid such future economic crisis. USgovernment is trying to prepare such guidelines that help in making sustainable financialdevelopments. Wall Street reforms are considered as a big step in this direction.
T
hese reformsaim at regulating the financial institutions in such an effective way that they withstand anyfinancial problem properly. New councils are being established to watch the activities and performance of the banking and non-banking sectors.Many of our contemporary scholars are also conducting the research works to trace the realcauses of present crisis and suggesting effective course of action for government and the policymakers.
T
he research work of these scholars would also help in identifying theshortcomings and loopholes in the financial system.
T
he present financial system can beimproved by taking in considerations the solutions given by them.
1.2 Significance of Study:
T
he present research study has a great significance in available literature about financial crisiswhich has happened, generally in the world and particularly in the USA.
T
his study presents avivid picture of recent financial crisis and evaluates the wall Street Reforms in a more

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