Financial Crisis in Kazakhstan

Kazakhstan Institute of Management, Economics and Strategic Research |

Bang College Business |

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| Financial Crisisin kazakhstanTerm paper | |

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Course:

Managerial Economics

Prepared by:

Almaty, 2012

1. Introduction

The purpose of this paper is to describe 2007-2009 global financial crisis reasons and define its consequences for Kazakhstan economy.

From the very beginning of year 2007 global economies faced series major economic and financial problems. Many economists consider events started in 2007 as the worst financial crisis since the Great Depression of the 1930s and the latest phase of the evolution of financial markets under the radical financial deregulation process that began in the late 1970s.

Since the Great Depression in 1930s almost everyone believed that financial markets need to be regulated to be stable, avoid fraud and manipulation. The strict financial regulatory system was created by US government to protect the country from mentioned dangers. It worked effectively through the 1960s. Economic and financial turbulence in the 1970s and early 1980s led to both a paradigm and a policy regime shift. Efficient financial market theory and new classical macro theory replaced the existing system of tight financial regulation. Such developments facilitated the transition to a new globally-integrated deregulated neoliberal capitalism.

As a result the world faced the threat of total collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. The crisis played a significant role in the failure of key businesses, declines in consumer wealth estimated in trillions of US dollars, and a...