Briefly Describe the Nature of the Recent Global Financial Crisis Essay

Briefly Describe the Nature of the Recent Global Financial Crisis (GFC) - Essay Example The governments of almost all the nations had to come up with packages that are required to move out from such a situation. The financial crisis will shed its impacts around the globe due to globalization. The livelihood of all people at every corner will feel the heat of crisis (World Bank, 2009). Financial Crisis The collapse of the U.S. housing market regarded as the housing bubble is characterized as one of the prime reason for the situation to arrive. The collapse resulted in surge of mortgage loan defaults (World Health Organization, 2009, 2). The collapse of the real estate market and the subprime mortgage market of the U.S. had the severe effects around the globe. Uncertainties accrued in the financial systems. The creditors involved themselves in pulling out their funds and cashed out securities that were issued by the financial institutions (Jalilian, n.d., 1). These lead to failure of many institutions while others struggled to survive poorly. The loan and credit possibili ties from the bank dried up (Baily, Litan, and Johnson, M., 2008, 11). There was a downturn in the share market as investors dumped their holdings. The system lost the confidence. In order to create securitization, the banks started to borrow more money. As long as the banks can pull out money by selling loans on the basis of securities, they did not feel the dependency to rely on the savers (European Commission, 2009, 8). Some of the banks even moved into mortgages. There was pressure from the government to serve the poor and the loans offered to the poor were risky as there was the fear of default (Roitman, 2009). They used to buy the mortgage in order to securitize them and then sell them. Some of the banks started to buy securities as well. This increased the exposure of the banks to risks. When the problem got realized, the process of lending got slowed. Some of the banks were on the verge of the most risky loans which was beyond the intention of the investors. The lenders fell upon to take back their loans. The investment banks fell drastically as they had no or little deposits. The problem got intensified and even the banks with large capital reserves began to feel the pressure. They turned to the government for support. The banks began to feel nervous to loan out the injected money and the shrinking banks sucked money out of the economy. Many economies are (or have been) in recession, technically defined as 2 or more quarters of negative growth or contraction of real GDP, for example the economies of the US, Japan, the Euro area, UK, and New Zealand (but not Australia). Among the other effects include rise in the level of unemployment, rising in the levels of international and domestic debt, crisis in housing and mortgage, failure of key businesses such as automobile industry of U.S., along with various banks and housing lenders. There were downturns in the share market along with declines in the wealth of the consumers. The volumes of international tr ade and investment declined. There has been some recovery with the assistance of the governments such as stimulatory spending (but often financed by further debt), financial institution guarantees and buyouts, and assistance to industries (but needed to be within the framework of WTO rules and agreements). In order to combat with the situation of fall in confidence it was necessary to inject liquidity into the financial institu

Leadership Essay Example | Topics and Well Written Essays - 250 words - 66

Leadership - Essay Example The poor organizational culture is among the key factors that contribute to the consistent failure of the team. On the contrary, the junior varsity team shows commitment to excellence owing to the ability of every team member to commit to the aspiration of the team coupled with their discipline and respect for each other. The existence of two teams each with a set of unique yet contradictory values shows a disjointed organizational structure with an equally uncoordinated organizational culture. Lack of effective leadership and models of communication within the organization is responsible for such a culture (Schein, 2010). Coach P is not yet in the â€Å"sweet pot† that Zenger and Folkman describe in their book. The two explain that in order for leaders to reach the sweet pot, they must enjoy success, have constant engagements, enjoy love from the firm and learn new skills happily from their daily experiences. Such are not the case at the Army Crew as the Varsity team does not enjoy and Coach P is always a frustrated coach owing to the team’s poor performance. Coach P can reach the sweet pot in his current organization. However, he must work hard in order to achieve that. Firstly, coach P must align his core competencies to the dictates of his team. This will enhance efficiency since ever undertaking will have a desirable result. Additionally, he must examine his passion and ensure that he stays happy at the organization. His attitude influences the outcome of the team (Zenger & Folkman,