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1 TOPIC: The 2008 US financial crisis affected and changed the stock market. STUDENT
NAME 5,744 words Academic writing research paper 2 Table of content: … … … … … … …
… … … … … … … … … … … … … … … … … … … … … … … .2 1.Introduction: .3 2. 1st
Arguments . 4 2.1. Effects of the crisis ..4 2.1.2 Responses to the crisis ..5 2.1.3 Fiscal
stimulation measures .. ...6 2. 2 Counter arguments ...6 2.2.1Advantages .. 7 2.2.2
Disadvantages ..7 3 2nd argument 7 3.1. Unprecedented Growth and Consumer Debt . 8
3.2 Adjustable rate ....9 3.3 Increased Consumer Debt .10 3.4

Government Starts Bailouts .. 10 3.5 Money policies ..11 4. 3rd argument .11 4.1Counter
arguments ..11 4.1.1Advantages .12 4.1.2 Disadvantages ...12 5. Challenges .13 6.
Conclusions ..14 7. References .15 3 Abstract: The inventory market of a state may be a
baromete ro h ainscptlmkt h have an impression on upon the volatility of inventory
market may be a correct indicator of the capacity of the inventory market to face up to a
monetary crisis.

Studying the have an impression on upon volatility of the inventory markets of the rising
economies presents a comparative image of the inventory markets. the top results of
this study are often employed by way of policymakers in designing the bilateral
alternate or enterprise amongst the countries. The practitioners can additionally use the
study to require a reputation as properly on make future choices of doing commercial
enterprise with different countries.

Stability of the market of a rustic in phrases of managing the monetary hiccups may be
a suitable parameter for identifying to try to commercial enterprise with a particular
nation. Deliberating and offering such inputs are the predominant motivations for
conducting this study. 1.Introduction The most influence of the monetary disaster is felt
on the inventory market volatility.

Financial literature is filled with research on the influence of economic disaster on

volatility. within the existing study the planet economic disaster of 2008 has been
undertaken. Though it's that the economic disaster of 2008 is special in phrases of its
intensity however via searching at the history it's determined that the extremely good
despair of 19 Thirties was once of the identical magnitude (Spiegel 2011).

Demyanenko and Van Herbert (2011) elaborated that extended deterioration of

mortgage nice accompanied with the help of preliminary upward jab then fall in lending
including unsustainable increase are the elemental reasons of the planet economic
disaster of 2008. International fund (2009) opined that the monetary disaster of 2008
began with the subprime consumer loan disaster and progressively unfold everywhere
the planet . Toman (2012) proposed that on the difficulty of motive for monetary
disaster of 2008 the planet is split into two-school of thoughts.

One faculty of notion says that truthful price accounting (FVA) is to be blamed for the
planet economic disaster of 2008 and therefore the different says that FVA is acceptable
and cannot be held guilty for the crisis. no matter the literature aiding the previous
reason or the latter this paper research the effect of the monetary disaster of 2008 on
the volatility of the inventory market of the rising economies.

The function and significance of volatility in reading finance and economic markets are
argued via Poon and Granger (2003) and Raja and Selvam (2011) which is additionally
supported via different research (Angeline and Weitzman 2011; Balasubramanian and
Premaratne 2003; Boleslaw et al. 1992). Earlier volatility was once assumed to be
constant.

However with time as greater lookup want to be done it wants to be determined that
volatility varies with time (Koranic 2008). Volatility is now and again understood as a risk.
But volatility and threat are not any longer one and therefore the same. Risk is said with
undesirable or undesirable effects whereas volatility may additionally flow 4 from to
fantastic adjustments or not always thanks to poor motives (Poon 2005). Earlier it had
been once sufficient to know the suggest return however now barring a measure of
volatility description of an economic market is incomplete.

After the monetary disaster of 1987 the focus shifted closer to the study of volatility
(Brailsford and Faff 1996).Volatility has its personal value within the economic world. it's
studied in finance for a variety of purposes. 2.Arguments: The monetary disaster of 2008
and inventory market volatility 445 second goal is to make a decision the uneven
behaviors or leverage impact of inventory market return collection of the rising
economies.

The 1/3 goal is to seek out about the have an impression on of the disaster on the
leverage impact of inventory market return of the rising economies. This paper has been
additionally organized into 4 greater sections. the subsequent part discusses the
preceding research administered during this field. Section three describes records and
lookup methodology utilized in the determine close to serve the targets of this paper.

Section four offers with consequences and Section 5 offers with discussions and
conclusion of this study. supports as nicely as criticizes the thought that developed
economies had been most suffering from means of the planet disaster of 2008 and
rising economies are notably much less impacted.). Narrate et al.

(2011) examined the volatility on 5 ASEAN markets (Malaysia Singapore Thailand

Indonesia and therefore the Philippines) and put forth the discovering that
consequences generated within the developed inventory markets cannot be generalized
for the rising economies. It wants to be located that there exists an outstanding
affiliation between volatility and market returns within the inventory market of rising
economies 2.1

Effects of the crisis on the developing and transition countries The crisis originated
within the major financial centers within the developed countries. The force of impact on
the developing and transition countries became apparent only gradually. things are new;
previous crises spread from the developing countries. this point developing countries
are the victims of the crisis financial crisis are to be found within the financial and
economic policies of the developed countries primarily the us (US). Developing
countries aren't liable for it but they're now seriously affected the new Director of the
South Centre in Geneva.

The IMF the planet Bank and other institutions continually downgraded their growth
predictions for Asia Latin America and in particular According to the IMF April 2009
World Economic Outlook (IMF WEO) the expansion setbacks within the threshold and
developing countries were above within the industrialized countries. Compared with
their growth potential. 5 Net capital flows to the developing countries sank sharply.

consistent with the planet Bank capital flows to the developing countries sank to USD
727 billion in 2008. within the previous year that they had still amounted to just about
USD 1 160 billion (see table 1). the planet Bank and therefore the IMF expect a slump for
the present year.
The Institute of International Finance confirmed the pronounced reverse and in June
2009 predicted capital flows within the current year in vigorously emerging markets (28
threshold countries) of USD 141 billion but half the figure for 2008 (USD 392 billion) and
only one-fifth of the flow in 2007 which amounted to USD 888 billion (IIF 2009). Above
all the countries in Eastern Europe and particularly Russia and Ukraine were very hard
hit.

The withdrawal of foreign capital led to devaluation of currencies within the developing
countries. 2.1.2 Responses to the crisis In the wealthy countries the discussion on the
way to affect the worldwide financial and depression marginalized the developing
countries and their needs. in the least events the impact of the crisis on the poor
countries didn't hit the headlines the way bank bailouts and toxic securities did.

In recent years many developing countries have made significant macro-economic

progress. Consequently a number of them are better armed against the crisis than they
were on previous occasions. These countries aren't exposed to the crisis with none
protection whatever.

Many governments within the developing countries have undertaken measures

consistent with their own powers. they need strengthened their (regional) cooperation
with each other . The UN IMF International Bank for Reconstruction and Development
and other international organizations have also endeavored to support the developing
countries.

They were urged to act by the non-governmental organizations and various academic
powers. : There is a substantial degree of variation within the initial position of the
individual developing countries. Some have high international currency reserves; others
have a considerable inland market.

However many countries had already been severely depleted by the food and energy
crises. 2.1.2 Fiscal stimulation measures: Wealthy countries responded with extensive
fiscal interventions. Numerous developing countries also launched programmed of this
type .

Countries with substantial international currency reserves and a coffee deficit like China
were during a position to try to programmed so. China announced a CNY 4 billion
programmed (some EUR 430 billion) for the years 2009 and 2010 to be invested in
domestic infrastructure Social Security technology environment and education. I.
Ortiz posted an analysis of fiscal stimulation plans in 43 employing a special fiscal
capacity indicator a UNESCO team ascertained that 43 of the 48 low-income countries
examined haven't any scope for stimulation packages in favor of the poor (UNESCO
2009). Higher bilateral aid and liquidity aid from the 6 international financing institutions
could significantly expand the range of options for such countries.

The global banks currently experiencing difficulties granted less and fewer credit to
developing and threshold countries. In 2009 there was even a net withdrawal of credits.
Towards the top of 2008 taking over loans by governments and personal enterprises in
developing countries was virtually at a standstill.

There was a notable rise in risk premiums and rates of interest for developing countries
on the bond markets. During the primary nine months of 2008 Brazil experienced a
capital drain of USD 13 billion Argentina USD 20 billion Important amongst them are to
figure out risk to verify how volatility is impacting the normal economy to be used as an
enter within the spinoff pricing and for forecasting monetary return sequence (Karmapa
2005a).

Information on volatility is additionally required for pricing of economic assets decision

of securities for the portfolio building and This paper presents right perception into the
capacity of inventory market of chosen cou nre ocnrn o iatri hae fvltlt n tshda mato h
inventory market. the first goal of the study is to spice up out a comparative study of the
behaviors of volatility before and after the earth economic disaster of 2008 on the
inventory markets of rising economies. 2.2

Counter Argument: September 15th marks the tenth anniversary of the demise of the
investment bank Lehman Brothers which presaged the most important financial crisis
and deepest economic recession since the nineteen-thirties. After Lehman filed for
bankruptcy and great swaths of the markets froze it looked as if many other major
financial institutions would also collapse.

On September 18 2008 Hank Paulson the Secretary of the Treasury and Ben Bernanke
the chairman of the Federal Reserve System visited Capitol Hill and told
-hundred-billion-dollar bank bailout the economic system would implode. Some
Republicans reluctantly put aside their reservations. The bailout bill passed. The panic on
Wall Street abated. then what? 2.2.1 Economic system: The standard narrative is that the
operation succeeded in stabilizing the economic system . The U.S.

economy rebounded spurred by a fiscal stimulus that the Obama Administration pushed
through Congress in February 2009. When the stimulus began to run down the Fed gave
the economy another boosts by buying vast quantities of bonds a policy referred to as
quantitative easing. Eventually the large banks prodded by the regulators and by
Congress reformed themselves to stop a recurrence of what happened in 2008 notably
by increasing the quantity of capital they hold in reserve to affect unexpected
contingencies.

this is often the essential story that Paulson Bernanke and Tim Geithner who was the
Treasury Secretary during the Obama Administration told in their respective memoirs. it
had been given a tutorial imprimatur by books like Daniel planet Stopped Another Great
Depression 7 This history is on its own terms perfectly accurate. within the early
nineteen-thirties when the authorities allowed thousands of banks to collapse the
percentage soared to almost twenty-five per cent and soup kitchens and shantytowns
sprang up across the country.

The aftermath of the 2008 crisis saw many hardship — millions of use citizens lost their
homes to mortgage foreclosures and by the summer of 2010 the jobless rate had risen
to almost ten per cent — but nothing of comparable scale. Today the percentage has
fallen all the thanks to 3.9 per cent. There is far more to the story though than this
uplifting Washington-based narrative.

In “rs ed: How a Decade of monetary Crises Changed the planet ”teCl umbia economic
historian Adam Ooze points out that we are still living with the results of 2008 including
tepltcloe.Uigtxaes oe oblotged n noptn ak rs was intrinsically political. So was
quantitative easing a tactic that other central banks also adopted floigteFd’ ed t
okdpimrl ybotn h oto oeay assets that were mostly owned by rich people.

As wages and incomes continued to languish the rescue effort generated a populist
backlash on each side of the Atlantic. Austerity policies especially in Europe added
another dark twist to the method of political polarization. As a result Ooze writes te“iaca
n depression of 2007-2012 morphed between 2013 and 2017 into a comprehensive
political and geopolitical crisis of the post – cl a rer — one that helped put Donald
Trump within the White House and brought right-wing nationalist parties to positions of
power in mn at fEoe hnsmgtb os of course Ooze n -year anniversary of 1929 would be
published in 1939. We aren't there a minimum of not yet.

But this is often undoubtedly a flash more uncomfortable and disconcerting than could
are In the years leading up to September 2008 Ooze reminds us many U.S. policymakers
and pundits were focused on the incorrect global danger: the likelihood that China by
reducing its huge holdings of U.S. Treasury bills would crash the worth of the dollar.
Meanwhile American authorities about ignored the madness developing within the
housing market and on Wall Street where bankers were slicing and dicing many
garbage-quality housing loans and selling them on to investors within the sort of
mortgage-backed securities. By 2006 this was the case for seven out of each ten new
mortgages. Ooze does a competent job of guiding readers through the toxic alphabet
soup of mortgage- based products that Wall Street cooked up: M.B.S.s C.D.O.s C.D.S.s

and so on. He looks askance at the transformation of economic banks like Citigroup
from long-term lenders into financial supermarkets in the decades before 2008 and he
rightly emphasizes the enabling role that successive Administrations played during this
process The subprime fever originated within the us but soon spread to European
behemoths like Deutsche Bank HSBC and Credit Suisse: by 2008 on the brink of thirty
per cent of all high-risk U.S. mortgage securities were held by foreign investors.

Although the main 8 international banks were domiciled and controlled in their
individual countries they were operating during a single integrated capital market. So
when the crisis struck and lots of sources of short-term bank funding dried up the ecu
banks were left tottering. In some respects they were in even worse shape than the
American banks because they needed to roll over their dollar-denominated mortgage
assets adErp’ eta ak n edr of last resort — the European financial institution the Bank of
England and therefore the Swiss National Bank — dd’ aeeog olr otd hmoe. 3.

Issues: 2ND ARGUMENT : How the financial crisis changed stock trading on Wall Street
3.1 Unprecedented Growth and Consumer Debt Subprime mortgages are mortgages
targeted at borrowers with less-than-perfect credit and less- than-adequate savings. a
rise in subprime borrowing began in 1999 because the Federal National Mortgage
Association (widely mentioned as Fannie Mae) began a concerted effort to form home
loans more accessible to those with lower credit and savings than lenders typically
required.

The role of Fannie and Freddie is to repurchase mortgages from the lenders who
originated them and make money when mortgage notes are paid. Thus ever-increasing
mortgage default rates led to a crippling decrease in revenue for these two companies.
3.2 Adjustable-Rate Mortgages Among the foremost potentially lethal of the mortgages
offered to subprime e borrowers were the interest-only ARM and therefore the payment
option ARM both adjustable-rate mortgages (ARMs).

Both of those mortgage types have the borrower making much lower initial payments
than would flow from under a fixed-rate mortgage. After a period of your time often
only two or three years these ARMs reset. The payments then fluctuate as frequently as
monthly often becoming much larger than the initial payments.

In the up-trending market that existed from 1999 through 2005 these mortgages were
virtually risk-free. Borrowers could find yourself with positive equity despite their low
mortgage payments because their homes had increased in value since the acquisition
date. If they might not afford the upper payments after their mortgage rates reset they
might just sell the homes for a profit.

However many argued that these creative mortgages were a disaster waiting to happen
within the event of a housing market downturn which might put owners during a
negative equity situation and make it impossible to sell. 3.3 Increased Consumer Debt
To compound the potential mortgage risk total consumer debt generally continued to
grow at an astonishing rate.

In 2004 consumer debt hit $2 trillion for the primary time. Howard S. Dvorakian
president and founding father of Consolidated Credit 9 The Rise of Mortgage-Related
Investment Products During the run-up in housing prices the mortgage-backed
securities (MBS) market became fashionable commercial investors. An MBS may be a
pool of mortgages grouped into one security.

Investors enjoy the premiums and interest payments on the individual mortgages the
safety. The Markets Begin to say no By March 2007 with the failure of Bear Stearns
thanks to huge losses resulting from its underwriting many of the investment vehicles
linked to the subprime mortgage market it became evident that the whole subprime
lending market was in trouble.

Homeowners were defaulting at high rates as all of the creative variations of subprime
mortgages were resetting to higher payments while home prices declined.. Despite this
apparent mess the financial markets continued higher into Oct. 2007 with the Dow
Jones Industrial Average (DJIA) reaching a closing high of 14 164 on Oct. 9 2007. The
turmoil eventually trapped and by Dec.

2007 the us had fallen into a recession. By early July 2008 the Dow Jones Industrial
Average would trade below 11 000 for the primary time in over two years. that might
not be the top of the decline. Lehman Brothers Collapses: On Sept. 6 2008 with the
financial markets down nearly 20% from the Oct. 2007 peaks the govt announced its
takeover of Federal National Mortgage Association and Federal Home Loan Mortgage
Corporation as a results of losses from heavy exposure to the collapsing subprime
mortgage market. One week later on Sept.
14 major investment company Lehman Brothers succumbed to its own overexposure to
the subprime mortgage market and announced the most important bankruptcy filing in
U.S. history at that point . The next Government Starts Bailouts: On Sept. 18 2008 talk
about a government bailout began sending the Dow up 410 points. subsequent day
Treasury Secretary Henry Paulson proposed that a Troubled Asset Relief Program (TARP)
of the maximum amount as $1 trillion be made available to shop for up toxic debt to
keep off an entire financial meltdown.

Also on today the Securities and Exchange Commission (SEC) initiated a short-lived ban
on short-selling the stocks of monetary companies believing this is able to stabilize the
markets. The markets surged on the news and investors sent the Dow up 456 points to
an intraday high of 11 483 finally closing up 361 at 11 388. These highs would convince
be of historical importance because the financial markets were close to undergo three
weeks of complete turmoil.

The Bottom Line: 10 The events of the autumn of 2008 are a lesson in what eventually
happens when rational thinking gives thanks to irrationality. While good intentions were
likely the catalyst resulting in the choice to expand the subprime mortgage market back
in 1999 somewhere along the way the us lost its senses. 3.5 Money policies: Other
countries like India opted for other paths.

India does have considerable international currency reserves to turn but it also has high
fiscal deficits which leave little room for increased expenditure. Consequently India put
the stress on monetary measures especially facilitating credit access options for
producers. for several developing countries however these money policy measures are
strictly limited because easement in interest policy impacts the rate of exchange of their
currency and therefore the rate of inflation.

Conversely the effect of devaluation of currencies as a selected export incentive measure

would probably be limited as long as global demand didn't rise more strongly. Some
countries in contrast have introduced selective trade restrictions on non-essential luxury
goods. 3rd ARGUMENT: 4. International initiatives The same ever-recurring themes run
sort of a red thread through the international initiatives to affect financial and economic
crises although they'll be weighted differently or maybe run within the opposing
direction.

it's always an issue of the reform of the international economic system acquisition of
additional liquidity control and regulation of markets and therefore the specific
competences of a good range of institutions. The processes within the UN: The UN
claimed a crucial role for itself at a really early juncture. UN Secretary General Ban Ki-
Moon had offered to host a worldwide conference on the financial crisis.

He received the backing of the Group of 77 (G-77) and lots of civil society organizations.
In vain! The UN and its sub-organizations did suggest analyses staged conferences and
seminars and proposed measures but the more important role fell to the G-20 and
therefore the Bretton Woods institutions.

The UN conference on the worldwide crisis: 34The UN conference on the worldwide

financial crisis which was selected at Doha was planned for the start of June 2009.
However the preparatory process proved difficult; just determining the modalities took
several weeks. The conference was first postponed then rescheduled for the top of June.
11 In the meantime the G-20 had already established facts at the summit in London (see
below).

With considerable effort they did manage to supply a closing document (UNO 2009b)
with many vague phrasing and no concrete plans of action. That was the results of an
embittered struggle between the industrialized countries and therefore the Group of 77
the latter protected by strong commitment on a part of the non-governmental
organizations .

From the G-8 to the G-20: The G-20has clearly assumed the role of coordinating
instrument for global economic and financial policy. the main threshold countries
definitely have their own place at the Group of Seven/Eight (G-7/G-8) table now. And
with this the industrialized countries have taken the changed global economic hierarchy
under consideration . The financial crisis further accelerated this development.

The G-20 represents 85% of the planet GDP but 2.6 billion (for the foremost part
impoverished) people and 172 countries are excluded. The G-20 put itself on the throne
rendering the legitimacy of selections with global impact questionable. Switzerland isn't
a member either. just like the Netherlands and Spain it doesn't even have observer
status.

After the Pittsburgh summit Swiss Federal Councilor and minister of finance
Hans-Rudolf Merz commented critically on its legitimacy. Officially the federal office of
Finance does however welcome the Pittsburgh resolutions (FDF 2009). . 4.2 International
financing institution activities The IMF and therefore the International Bank for
Reconstruction and Development also as other multilateral financing institutions
addressed the financial and depression early and on their own initiative. At an
equivalent time the G-20 resolutions also added impetus.
the other way around the heads of those organizations weren't loath to call urgently on
the G-20 heads of State for speedier and more intensive action. They were ready to
attend the summits as observers. IMF policies and measures: Hardly any State had asked
for credit aid over an extended period and therefore the sum of the outstanding credits
had sunk to a rock bottom . In October 2008 several countries had to use to the IMF for
aid.

Suddenly the question arose of whether the IMF would have enough resources if it were
confronted with numerous large-scale applications for loans thanks to the financial
crisis. At an equivalent time this about-turn in calls on the IMF challenged it to
accelerate and complete the continued revision of its credit instruments. This also
involved an examination of the frequently criticized policy conditions for granting loans.

because the IMF recommended massive stimulation programmed to the industrialized

countries impacted by the crisis the developing countries accused the IMF of double
standards in sight of their previous experience with its stringent conditions. and
eventually the developing countries emphatically urged the IMF to eventually intensify
the reforms on voting rights and other governance questions.

12 At the annual meeting in Istanbul the IMF monetary and finance commission
confirmed the G-20 agreement and called thereon to continue with the reforms already
initiated. For the foremost part Hans-Rudolf Merz would really like to imitate . However
whenever there was a possible conflict of interests between the cautious financial
gestures of the IMF and increased transfer of resources to the developing countries
Merz always upheld the previous e.g.

within the question of utilization of special drawing rights within the event of possible
financial risks for the IMF with watered down conditionalities and within the deployment
of gold reserves and interest costs for loans to the poorest countries (FDF 2009b). World
Bank policies and measures The World Bank rapidly became a crucial advocate for the
developing countries in overcoming the financial crisis.

it had been soon patent that the poorest countries already depleted by the food and
energy crisis had few possibilities of providing the required responses from their own
resources. 61The International Bank for Reconstruction and Development submitted two
papers beginning the basics of its response to the crisis (Development Committee 2009
2009a) to the event committee at the Istanbul annual meeting.

Subsequently the planet Bank Group raised its total lending activities within the 2009
fiscal year by 54% compared to the previous year to some USD 60 billion. One-third of
this visited infrastructure projects within the hope of rapidly increasing employment and
usually stimulating the economy. 4.3 Counter argument: Some USD 33 billion of the
entire package of USD 60 billion skilled the International Bank for Reconstruction and
Development (IBRD) via trade credits to middle-income countries. the planet Bank
expects an extra rise within the coming years.

Financing cannot be covered by this International Bank for Reconstruction and

Development capital basis. On one hand it raised the interest on loans; on the opposite
it took up significantly more funds on the international capital markets. The World Bank
was called to heel at the 2009 annual meeting in Istanbul.

within the development committee the industrialized countries bridled at an

instantaneous raise in capital which the planet Bank needed supported by the
developing countries. the planet Bank is to form further clarifications before subsequent
spring meeting. Stronger South-South cooperation: There are hardly any reliable figures
available so far on the consequences of the crisis on South- South trade and
South-South direct investment.

The pronounced growth of past years is going to be somewhat slowed but will continue
consistent with Khalil Hamdani Special Adviser of the South Centre in Geneva (Hamdani
2009). An exemplar of strengthened South-South cooperation is that the expansion of
the Association of South-East Asian Nations (ASEAN) multilateral credit agreement.

In February 2009 the finance ministers of those countries plus China Japan and Korea
raised the scope of this Chiang Mai Initiative to USD 120 billion (ASEAN 2009). 13
International initiatives The same ever-recurring themes run sort of a red thread through
the international initiatives to affect financial and economic crises although they'll be
weighted differently or maybe run within the opposing direction.

it's always an issue of the reform of the international economic system acquisition of
additional liquidity control and regulation of markets and therefore the specific
competences of a good range of institutions. The primary actors for development policy
debates were the UN and certain of their special organizations the Bretton Woods
institutions the EU and therefore the regional development banks. The G-20 assumed an
incontestable role.

Non-governmental organizations throughout the planet played a lively part in these

discussions and published numerous documents. Many within the academic world were
concerned with these issues. 5. Conclusions: There is little question that one among the
results of the financial and depression was a shift in power and influence.
The ascendance of the G-20 at the value of the G-8 is irreversible. The larger threshold
countries are demanding more influence. Brazil China India and South Africa don't want
to place up with a modest further shift of only 5% of voting rights. A renewed conflict is
imminent. In view of the big government and issuing banks refinancing programmed
alongside the great economic stimulation measures there's a long-term threat of
enormous budget deficits and mounting debt primarily within the industrialized
countries.

the way to deal with this issue may be a primary element of public economy and
political debate. Within the frame of their debt sustainability programmed the I fa
flexibilization ” of the debt limits for poorer countries in order that they might incur
higher debts.

The Friedrich Ebert Foundation feels that this is often on a par with disbanding the
hearth brigade when a fireplace is imminent (Kaiser Knokke and Koski 2009). All HIPCs
would be exposed to a minimum of a moderate risk of being involved in any future debt
crisis. The finance sector caused the crisis and will bear the costs! In August 2009 the
President of British Financial Services Authority Adair Turner therefore proposed the
introduction of a financial transaction tax and French and German government circles
supported the thought .

Before the Pittsburgh summit non-governmental organizations wrote to the G-20 that a
tax of this type should be introduced and therefore the income used for development
purposes. The motion wasn't discussed seriously either in Pittsburgh or in Istanbul. The
high money requirements to finance the economy stimulation measures and therefore
the bank bailouts were certainly one reason for stepping up the campaign against
international evasion . However the measures introduced so far largely bypass the
requirements of the developing countries.

Most talked about were the black and gray lists involved by the G-20 in conjunction with
OECD. Any country which didn't have a minimum of 12 double taxation agreements
(DTAs) or tax information exchange agreements (TIEAs) with other countries was
blacklisted. These 14 agreements must at least meet the OECD minimum standards for
mutual exchange of tax information for the asking .

The lists were updated continually (OECD 2009a). OECD presents a review of its efforts
within the struggle against evasion in an informative brochure published in October
2009. within the meantime consistent with OECD the offshore centers monitored have
signed 90 new agreements for improved exchange of data since April and over 60 are
currently being negotiated. New ones are being added continually.

OECD argued that Finally at end-October the Tax Justice Network published an in-depth
on-line database listing over 60 tax havens and secrecy jurisdictions which is being
expanded and updated continually (Tax Justice Network 2009a). Each of those havens
was examined consistent with 12 indicators selected to supply information on the
degree of transparency and therefore the spheres of secrecy.

supported this the Tax Justice Network will shortly also publish a replacement In the
wake of the financial crisis Swiss financial center has come under heavy pressure from
two sides and has had to form significant concessions. On one hand the behavior of UBS
within the US was harmful. In February 2009 Switzerland had to disclose the info for a
few 300 UBS clients to the US.

At end-July Switzerland and therefore the US agreed to settle the US civil proceedings
against UBS out of court. On the opposite hand Switzerland was also placed on the
OECD and G-20 grey list in April 2009. The Federal Council had actually resolved on 13
March 2009 that Switzerland adopt the OECD standard for administrative aid in tax
matters pursuant to article 26 of the OECD model agreement (FDF 2009c). 15
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