Eurozone and Global Financial Crisis

Treasury Management

“Report on the Global Financial Crisis and the Eurozone Sovereign Debt Crisis in relation to the Banking Sector”

AFW 3651

Table of Contents

Letter of Transmittal 2

Executive Summary 3

Introduction 4

Global Financial Crisis and the Eurozone Sovereign Debt Crisis and its Causes and Challenges faced by the Banking Sector Treasuries 5

Global Imbalances 5

Deregulation, Weak Regulations, Lack of Government Monitoring and Control and Ineffective Monetary Policies and contrasting Fiscal Policies 7

Subprime Market Expansion and Predatory Lending and Over Leveraging 8

Widespread Adoption of New Securitization Techniques and Financial Instruments 9

Consequences and Impacts of the Crisis on Bank Treasuries 10

Demand for Liquid Funds and Contraction within the Money Markets 10

Lower Consumer Confidence in Banks 11

Interbank Market Seizure and Lowered Credit ratings Meant Loss of Access to Short Term Funds 11

Actions Taken by Banking Sector 12

Increase in Interest Rates 12

Burrowed More Funds 12

Access Government Bailout Packages for Recapitilasation 12

Recommendations to the Banking Sector 13

Tighter Financial Regulations Control Adoption of Prudent Financial Reporting and more Accounting Disclosures 13

Increase in Capital Adequacy Requirements 13

Enhance Risk Management Systems and Forecasting abilities 13

Conclusion 14

References 15

Letter of Transmittal

To: Dr. Sockalingam R. Ramasamy

Date: 21st September 2012

Subject: Report on the Global Financial Crisis and the Eurozone Sovereign Debt Crisis

I am pleased to present to you this Report, on the Global Financial Crisis and the Eurozone Sovereign Debt Crisis, following rigours research I have compiled together a comprehensible and in-depth look at the financial weather presented in those specific time periods. The Report will contain a summary of how the crises began the causes. The report will highlight the challenges faced by the banking...