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Money - Investing
By: - at January 10, 2013

The Recent 2007 Financial Crisis of the World

CrisisArguably the worst global financial crisis since the Great Depression of the 30's occurred in 2007.  The crash in 2007 is now being dubbed as the worst global financial crisis because it effected all parts of the world to varying degrees.  The crisis resulted in the bailout of many reputed banks by national governments across the globe.  The world's major financial institutions and stock exchanges suffered terribly due to the crisis.

Consumer's confidence fell sharply and many banks found it hard to regain customer's confidence.  The U.S. economy relies on consumer confidence for currency rates and loan calculations.  The USA and EU were worst-hit by the crisis.  Many world leaders advocated for changing existing policies and including more integrated policies to prevent further crisis in the future. The crisis however, helped many countries to look into the core problems of governmental financial policies. One of the main causes of the crisis was that banks were lending too many unsecured loans to the public.  As the financial institutions continued to fail to recover debts from its borrowers, it soon worsened the situation that triggered a world-wide panic.

Money BurningThere should be more mutual understanding between lenders and borrowers.  Also better coordination between central banks and the retail financial institutions.  The national governments should be more actively involved in decision making policies when it comes to looking after the interests of the public and national interests in general.

The world is recovering steadily from the financial crisis and many financial institutions have realized how they should manage their finances.  Inter-exchange of funds and cooperation among international merchant banks needs done by coordinating appropriately and abiding by national banking regulations.  By using  a global approach to making the financial system more stable, a repeat of the 2007 financial crisis will be unlikely.  Hopefully the near-collapse of banks serves as a lesson to banks and consumers.  Hopefully safeguards have been put into place making it highly unlikely a similar collapse will occur.


 

 

 

 

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