Coporate Institution and Corporation

Table of Contents

1. Executive summary 2

2. Introduction 3

3. Body 3

3.1 Analysis of causes of the crisis 3

3.1.1 Housing bubble and subprime mortgage crisis 3

3.1.2 Global imbalance 4

3.1.3 Financial Innovation 5

3.2 The impacts of this global financial crisis 5

3.2.1 Impact on the world economy 5

3.2.2 Impact on stock market 5

3.2.3 Impact on manufacturing activity 6

3.2.4 Impact on developing countries 6

4. Conclusion and lessons learned from the crisis 8

5. References 10

Executive summary

The global financial crisis in 2008 has led to one of the biggest recessions spread all over the world. It caused a considerable slowdown in almost all developed and developing countries. Although all Governments around the world have been trying to correct and improve the situation, its negative impacts on the world economy are still inevitable. This paper with an aim to bring a deeper understanding about this crisis will focus on the causes how the recession happened, included the US housing bubble, the global imbalance and the financial innovation; then it will explain how the world financial market has been affected; and finally the lessons which can be learned from the crisis would be mentioned.

Introduction

The financial crisis first broke in the US, following the bankruptcy of Lehman Brothers in September 2008. After that, it rapidly spread to other regions like Europe, Middle East; and had made the world economic and financial system a very hard time. The stock markets were down more than 40% from the current high. About 100 investment banks, commercial banks and financial firms were collapsed. In fact, more than a trillion US dollars were drawn up as rescue packages, however, it still caused a lot of economic turndowns, include the slowdown in economy growth, increase in poverty and unemployment due to reduction in manufacturing activities (Velde, 2008).

Body

1 Analysis of causes of the crisis...