Is another Financial Crisis

possible?
FANATICS

Current Scenario
US (MODERATELY POSITIVE)

US growth modest 2.6 percent in 2015

Americas strength in technological progress needs to
help accelerate productivity, which is doing well
EURO-AREA: CAUTIOUS SHORT-TERM
OPTIMISM, BUT DOWNSIDE RISKS
ACCUMULATE
Euro Area is projected to grow at 1.6 percent
Domestic consumption is a likely source of growth as
labor markets improve.

ASIA-PACIFIC: CHALLENGING IN CHINA; MOSTLY

POSITIVE ELSEWHERE

Despite softening growth rates, the Asia-Pacific region remains the leader for
global growth.
Growth rates of China and India 5.5 percent from 20152019.
Southeast Asia will strengthen to global production base.

LATIN AMERICA: UPSIDE POTENTIAL

Economic conditions in Latin America are unlikely to improve rapidly in 2015
Regional growth at only 1.8 percent.
Slowing prices for commodity and energy exports
AFRICA: POSITIVE, BUT UNCERTAIN

GDP growth in Africa in 2015 is projected at 4.4 percent.

A positive growth outlook for Africa is strongly dependent on improved
institutional performance and better governance.

Another banking crisis?

Collapse of a large bank; banks are leveraged and

insider information is difficult to obtain;

repercussions will be less severe

Banks are now required to hold more capital (larger cushion to

absorb losses)
Liquidity requirements.

Another Euro Crisis?

Survival of the Euro can be doubted
May lead to abandoning of the euro by a new govt.
Greeces opposition left wing party, Syriza, might

step out of Euro if it comes in power

Domino Effect
Panicked runs on banks and financial markets in
Europe
Leaders are more prepared

Strengthening of USD may lead to a crisis?

Appreciation leads to increase in lending for other

countries
Foreign Debt exceed earning power
The Asian Financial Crisis 1997
The Latin America Crisis (1980s-90s)

How changes in crude oil may affect the ecnomy?

Real-world effects on world economies
Saudi Arabia uses its oil well to support its entire

economy
Venezuela for every $10 drop in oil prices loses
$7.5bn revenues

Remedies
Monetary Easing

Europe
Japan

Implementation of Acts

Dodd--Frank Wall Street Reform and Consumer Protection Act

GLASS-STEAGALL ACT