The Global Financial Crisis Essay -- subprime mortgages, Great Recessi

1.Introduction1.1.BackgroundThe Financial crisis was triggered in 2006 when US lodgment market began to crumble as the housing price reached their highest point later years of speculative price increase many house owners defaulted on their loans, particularly subprime mortgagers (Archarya et al., 2009). Starting in mid-2007, the outburst of US housing guggle in the subprime mortgage leads to the global pecuniary crisis that has been often so called slap-up deferral (Verick and Islam, 2010).Archarya et al. (2009) states that it is widely agreed that the fundamental cause of this global financial crisis was the credit boom and the housing bubble. While Poole (2010) argued that it is a mistake to moreover take subprime mortgage issue as a unique antecedent of the crisis. With regard to the root causes behind the subprime mortgage issue, Verick and Isalam (2010) suggested below four factors that atomic number 18 low interest rate let ins banks to search for high yield investit ure with high risk such as subprime mortgage (Crouhy et al. 2008) global imbalances amongst US the unreasonable consumption by depict and China the excessive saving by surplus fuelled the housing bubble and credit boom, it is most connected with financial crisis (Obstfeld and Rogoff, 2009) misperception the risk of the subprime mortgage defaults loose financial economy that failed to control the standards in the mortgage market, and this point is conducted by Crotty (2009) that regulators allow banks to hold assets off balance sheet without capital requirement to support them.After this introductory section, section 2 discusses the impact of inlet on customer behaviour section 3 presents an analysis on how does the recession affect the companies profitabilit... ...une. Available at http//www.tradewindsnews.com/weekly/w2009-06-26/article200083.ece5 (Assessed on 30 November 2013)Vaitilingam, R., (2009). Recession Britain Findings from Economic and Social Research. Online Availa ble at http//www.esrc.ac.uk/_images/Recession_Britain_tcm8-4598.pdf (Assessed on 24 November 2013)UNCTAD, (2010). retrospect of World Maritime Transport 2010. Online Available at http//unctad.org/en/docs/rmt2010ch3_en.pdf (Assessed on 5 December 2013)Verick, S. and Islam, I., (2010). The Great Recession of 2008-2009 Causes, Consequences and Policy Responses. Online Available at http//papers.ssrn.com/sol3/papers.cfm?abstract_id=1631069 (Assessed on 21 November 2013) Yang, D., Liu, M.J. and Shi, X.N., (2011). Verifying Liner Shipping Alliances Stability by Applying Core Theory. Research in transference Economics, 32(1), pp. 15-24.