The Financial Crisis Of 2007-2008 Fading - 2282 Words

Introduction: Hitherto, an abundance of economic literature exists concerning the determination of asset returns. With the footprint of the financial crisis of 2007-2008 fading, renewed interest of this topic has flourished, as both economists and politicians seek to enhance the understanding of the dynamic relations that exist between asset returns and a series of other economic indicators. Prior to the crisis, the availability of credit expanded significantly due to favourable market conditions. As a result, commercial banks increased substantially the volume of sub-prime mortgages being offered to borrowers. In practise despite misconceptions, â€Å"Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money† (McLeay, Radia and Thomas, 2014, pp.1). In the period of 2000-2007, it is estimated that banks created over  £1 trillion through their issuance of loans to borrowers prior to the crisis (Positive Money, 2014). Consequently, the impact of such a credit expansion caused real assets, such as house prices, to increase as a result of the increased demand. Similarly, through the same mechanism, an expansion of credit also caused increases in the values of securities tied to U.S real estate (i.e. mortgage-backed securities), as investors believed that house prices would continue to rise. Furthermore, one might postulate that changes in economic variables, such as the money supply or rate of inflation,Show MoreRelatedJb Hi-Fi Report3981 Words   |  16 Pagesthe shop floor. JBH uses its size and mix of high growth categories to increase its buying and advertising synergies. They are focused on growth, opening 39 stores in the past 2 years and a securing another 18 sites set to open in the 2009/2010 financial year. As of the 30th of June 2009, the company had 123 stores operating around Australia and New Zealand. (106 branded JB Hi-Fi) JBH delivered another record result in 2009 with sales up 27.3%on the prior year, EBIT growth of 39% and NPAT growthRead MoreThe Fading Nokia3126 Words   |  13 Pagescoming from official Nokia on June 14th shows that there will be 10 thousand staff fired by the end of 2013, causing the mobile phone area norm these days. It is truly the hardest time for Nokia now. As a result, this essay is aimed to describe the fading process of Nokia and explore the severe condition of it. In general, this project will be divided into 4 parts. Firstly, it will look at the glorious period of Nokia and give examples of some significant events, and the second part is going toRead MoreU.S. Economic Growth in a Post-Recession Economy Essay example2205 Words   |  9 PagesLLB Index: 1. Hypothesis 2. Background -Severity of the 2008-09 Recession 3. 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