Many laws have been successful in restricting such practices in order to avoid a similar situation in the future. Today, "when a mortgage borrower wins a rescission case in court, the bank loses the right to foreclose, and has to give up all profits from interest and fees on the loan" (Carter, 2012). However, just a few years after predatory lending caused so much damage, there are already movements to once again make it a possible scenario for contemporary lenders. The research posits that "under the Fed's new proposal, however, borrowers would be required to pay off the balance of the loan before the bank loses its right to foreclose -- that means borrowers could still lose their homes, even in cases where banks have broken the law" (Carter, 2012). Only time will tell whether or not law makers attempt at reining in financial predators will actually work. As…...

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References

Baker, Dean. (2008). The housing crash recession: How did we get here? PBS. Web.  http://www.pbs.org/now/shows/412/housing-recession.html 

Carter, Zach. (2012). FED moves to gut predatory lending regulation. Huffington Post. Web.  http://www.huffingtonpost.com/2011/01/04/federal-reserve-rescission-regulation_n_804334.html 

Geffner, Marice. (2012). Why the housing crash remains a wreck. BankRate. Web.  http://www.bankrate.com/finance/mortgages/why-the-housing-crash-remains-a-wreck-1.aspx 

Holt, Jeff. (2009). A summary of the primary causes of the housing bubble and the resulting credit crisis: A non-technical paper. The Journal of Business Inquiry, 8(1), 120-129.

" (2009) Yam states that over the past year the need existed to involve the government more deeply in the banking industry and especially in the area of deposit guarantees and in the supervision of the risk management of banks. Yam states that it is "…gratifying that so many of the tools that we have been able to rely on, including the apparatus and contingency arrangements for ensuring liquidity, have been developed in a pre-emptive rather than a reactive way. On the various emergency measures, I am quite sure that in the fullness of time, these will either be turned into standing arrangements or withdrawn, hopefully through smooth exit strategies. but, current sentiment is clearly demanding much closer regulation and supervision of banks over the longer term." (2009) the form that this will take is stated to be pending in the international forums however Yam states that the thinking thus…...

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Bibliography

Bradsher, Keith (2008) Hong Kong Backs Bank Deposits for 2 Years. 14 Oct 2008. The New York Times. Online available at:  http://www.nytimes.com/2008/10/15/business/worldbusiness/15deposits.html 

Kumar, Phani V. (2010) Hong Kong Rebounds as Banks, Resource Stocks. 15 Mar 2010. Market Pulse, Market Watch. Online available at:  http://www.marketwatch.com/story/hong-kong-rebounds-as-banks-resource-stocks-2010-03-15 

Hong Kong Banking Industry Overview (2010) Janus Corporate Solutions. Online available at:  http://www.guidemehongkong.com/company/c774-hong-kong-banking-industry-overview.htm 

Hall, Maximilian J.B. Hall, Kenjeglieva, Karligash a. And Simper, Richard (2008) Environmental Factors Affecting Hong Kong Banking: A Post-Asian Financial Crisis Efficiency Analysis. Loughborough University and Hong Kong Institute for Monetary Research

Financial Crisis and Its Implications: Events Occurring Between 2007 and 2009
A Critical Literature Review

The Roots of the Crisis

Real Estate Valuation Bubble

Sub-Prime Mortgages

Low Interest Rates

Moral Hazard in Regard to Consumer Spending

Packaging Real Estate Loans as a Commodity (Derivatives)

Market Interrelatedness

Future Implications

The financial crisis, which seemed to be elevated to its greatest extent world-wide between the years 2007 and 2009, is difficult to unravel. The causes, interlink-ages, and effects are so intertwined that it is hard to separate them into a "first cause" or anything else that would resemble a succinct explanation. Although in retrospect, many individual underlying themes are attributed to the underpinnings of the crisis; in reality there are a plethora of variables that must be accounted for in trying to determine the crisis's root cause. Additionally, none of these factors can be considered in a vacuum. That is, none of the factors that are relevant acted independently. Instead, the variables…...

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Works Cited

Asensio, A, and D. Lang. "The Financial Crisis, Its Economic Consequences, and How to Get Out of It." International Journal of Political Economy, 2010: 58-69.

Focardi, S, and F. Fabozzi. "THE REASONABLE EFFECTIVENESS OF MATHEMATICS IN ECONOMICS." American Economist, 2010: 19-30.

Fratianni, M, and F. Marchionne. " The Role of Banks in the Subprime Financial Crisis ." Review of Economic Conditions, 2009.

Konings, M. "Rethinking Neoliberalism and the Subprime Crisis: Beyond the Re-regulation Agenda." Competition & Change, 2009: 108-127.

These borrowers had -- knowingly or not -- been gambling on a real estate market they did not understand. Understanding the complexities of the real estate market and fiscal policy is complicated -- those who have grown up without access to the best education and who do not have experienced friends and family to help advise them in this process were the most vulnerable.
Squires, Hyra and Renner showed that subprime lenders were able to segment their market by geography. Combined with the ethnic segregation that exists in most American cities, the outcome was simple -- minorities were targeted for subprime loans. The poor and working class were targeted by predatory lenders. hen the crisis hit, it was these groups that suffered the most and foreclosure rates in these communities spiked.

Interest Rates & Bank Deregulation

To spur economic growth during the slowdown in 2000-02, the Federal Reserve lowered interest rates and…...

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Works Cited:

Squires, G.; Hyra, D.; Renner, R. (2009). Segregation and the subprime lending crisis. EPI Briefing Paper. Retrieved February 15, 2010 from  http://epi.3cdn.net/d1219ac2d8a407a2f5_b3m6b5bkb.pdf 

Scott, J. & Leonhardt, D. (no date). Shadowy lines that divide.

Financial crisis that emerged in 2008 came about because of a number of different factors that all contributed something to the problem. Ostensibly, this was a credit crunch. A credit crunch occurs when lender either no longer have money to lend or they are prohibited or unwilling to do so.
Mussa (2008) notes a truth that Adam Smith recorded that while money is an essential part of an economy's capital stock, it was not directly useful but rather indirectly useful through consumption or production. So what we saw with the credit crunch was that lenders were not lending. This brought about conditions where firms did not have access to the capital that they needed in order to grow. Then, of course, this became a contagion. orries about the economy slowing down due to a lack of credit had otherwise healthy companies cancelling projects and money that otherwise could have been lent…...

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Works Cited:

Mussa, M. (2008). Adam Smith and the political economy of a modern financial crisis. Business Economics Vol. 44 (1) 3-16.

Poole, W. (2008). The credit crunch of 2007-2008: Lessons private and public. Business Economics. Vol. 44 (1) 38-40.

In other words, there are few controls in place to ensure responsible spending or, in the case of Greece, that the books are not cooked. The implication of this is that Greece makes errors and commits fraud, knowing that the eurozone will be forced to bail them out or risk grave instability. The other nations are then forced to bail Greece out, because they share a common currency and therefore a common economic fate, but also because the Germans benefited from the high current account balance in the first place.
There are a number of potential solutions. The eurozone could determine that addition by subtraction is a good strategy. Despite the short-term instability, it would allow the zone to be comprised of major exporting and otherwise fiscally responsible nations. Throwing the PIGS under the bus may be difficult politically and cause severe harm in the short-run, but could benefit the…...

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Works Cited:

Kulish, N. (2010). Opposition grows in Germany to bailout for Greece. New York Times. Retrieved March 24, 2010 from  http://www.nytimes.com/2010/02/16/world/europe/16germany.html 

Walberg, E. (2010). Euro crisis: Latvia and the PIGS. Global Research.ca. Retrieved March 24, 2010 from  http://www.globalresearch.ca/index.php?context=viewArticle&code=WAL20100316&articleId=18144 

No author. (2008). IMF approves bailout for Latvia. BBC. Retrieved March 24, 2010 from  http://news.bbc.co.uk/2/hi/7798776.stm 

Krugman, P. (2010). Anatomy of a euromess. New York Times. Retrieved March 24, 2010 from  http://krugman.blogs.nytimes.com/2010/02/09/anatomy-of-a-euromess/

The partisan politics seen south of the border would be impossible, because the resulting inaction would be viewed unfavorably by Canadians.
The financial crisis has damaged Canada economically, but it has also highlighted the value of financial conservatism. Canada's handling of the crisis has improved its standing in the world. The Canadian banking system has been lauded for its conservative nature. Further esteem has been brought to the government for its role in building a strong, stable banking system. Many economic observers have taken notice of Canada's successes and prescribed some of Canada's regulations as a future path for their own banking systems.

Aside from banking, Canada is now showing some signs of economic weakness. The country's relatively strength, however, has caused the government to take relatively little action on the crisis. This has not enhanced Canada's international standing, but it has not hurt it either. Canada has not needed to…...

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Works Cited:

No author. (2007). Gross Domestic Product. World Bank. Retrieved April 20, 2009 from  http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf 

Uptigrove, Mark. (2005). Canada's Petro-Currency Cushion. Morningstar. Retrieved April 20, 2009 from  http://quicktake.morningstar.com/Stocknet/san.aspx?id=145803 

CIA World Factbook: Canada (2009). Retrieved April 20, 2009 from  https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html 

Zakaria, Fareed. (2009). Worthwhile Canadian Initiative. Newsweek. Retrieved April 20, 2009 from http://www.newsweek.com/id/183670

Financial Crisis
Contemporary Social and Political Issue: The Financial Crisis

The current recession is considered among the worst in U.S. history. As it has been characterized by policy experts, public officials and members of private industries alike, the U.S. economy is experiencing a financial crisis which is surpassed at present only by the Great Depression which persisted across the 1930s. This qualifies as perhaps the most pressing political and social issue of our times. Indeed, there is not a profession or walk of American life that has not been impacted by the litany of collapsed banks, belly-up investment groups, embezzled pensions, budgetary deficits and housing/auto industry bubble bursts that have occurred across the last five years.

As public officials in Congress and the Obama Administration have enacted dramatic and controversial legislative packages in order to reverse an already cresting tide, it is clear that the very same Departments of the U.S. Government which…...

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Works Cited:

Brewer, P. (2009). Root Causes of the Financial Crisis. WiseBread

Hudson, M. (2008). Financial Bailout: America's Own Kleptocracy. Global Research.ca.

Katz, C. (2011). Cuomo on Radio Paterson: I 'Respect' The Occupy Wall Street Protests, But We'll Maintain Order. New York Daily News.

In that regard, the regulatory changes that allowed banks and other mortgage lenders to sell off their obligations (and the development of complex investment techniques to do so) undermined the integrity of the U.S. housing market. Specifically, Wall Street investment firms and mortgage banks began purchasing, repackaging, and trading in all of the individual home mortgages simultaneous to the elimination of any natural incentive of lenders to ensure that their borrowers were safe risks (Bhide, 2009). The obvious solution to that problem would be to prosecute lenders, mortgage brokers, realtors, and certain borrowers who deliberately ignored their legal duties to conduct business in good faith (Bradley, 2008).
Fundamental Ethical Problems and Conflicts of Interests

Throughout the financial services and mortgage lending industry that developed after the most recent era of deregulation, the de facto elimination of any liability or risk on the part of lenders for bad loans generated fraudulent practices…...

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References

Bhide a. "Why Bankers Got So Reckless" Business Week (February 9, 2009): 30-31.

Bradley D. "Real Estate Fraud." The FBI Law Enforcement Bulletin Vol. 77, No. 9

(2008): 1-4.

Nocera J. "Risk Mismanagement: Were the Measures Used to Evaluate Wall Street

What one can determine from the current literature, however, was that today's recession was fueled, at least in part, by the misuse and misdistribution of credit. For this reason, the current culture shift is most likely a solution to the problem it itself. esponding to the recession, the American people have changed their attitude toward politics, spending, and the importance of finances in their daily lives. By spending less, relying on credit less, and saving more, the American people are bound to aid in ending the current financial crisis. Government, on the other hand, must step in to regulate what the people cannot in their own personal finances. By encouraging the Democratic plans of tax cuts and job creation, the American people can continue to advocate for the solution of the problem. Thus, finance and the economy are large contributors to a group's culture. The current recession is no…...

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References

Barbaro, Micahel and Uchitelle, Louis. (2008, January 14). Americans Cut Back Sharply

On Spending. The New York Times. Retrieved from,  http://www.nytimes.com/2008/01/14/business/14spend.html 

Banking Crisis Timeline. (2008, October 30). The Guardian. Retrieved November 17, 2008 at  http://www.guardian.co.uk/business/2008/oct/08/creditcrunch.marketturmoil 

BBC. (2008, September 26). Q&a: Financial crisis and you. Retrieved November 17, 2008 at  http://news.bbc.co.uk/2/hi/business/7625419.stm

The 2008 financial crisis is considered the worst economic disaster to ever affect the world since the occurrence of the Great Depression of 1929. The crisis led to the collapsing of the financial system in the U.S. and other countries in Europe. Millions of people lost their jobs on either side of the Atlantic because of the financial crisis. Different authorities responded differently to curb the crisis in their backyard. This paper looks at the similarities between the crisis in the U.S. and the one in the Euro Zone while also outlining the difference between the two regions. In the U.S., the financial crisis was mainly caused by deregulation in the financial industry. Banks were permitted to engage in hedge fund trading with derivatives. As a result, banks demanded more mortgages to support the business. Most of the financial institutions in the U.S. created interest-only loans that became affordable to borrowers…...

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References

Blinder, A. S. (2013). After the music stopped: The financial crisis, the response, and the work ahead. Penguin Books

Reflection Paper: Mortgage CrisisThe mortgage crisis came about because starting in the 1990s under the Clinton Administration, a push for greater home ownership was facilitated by a lowering of lending standards for home buyer borrowers. This created artificial demand in the housing market, and prices of homes soared. Over the course of the next decade, lending standards rapidly deteriorated, and home mortgages were being bundled and sold to investors as collateralized debt obligations, and derivatives were added to the mix so that an enormous financial industry focused on mortgage-backed securities had grown into a behemoth (Lewis, 2010). The Federal Reserve had kept interest rates low in response to the Dot Com bubble bursting at the turn of the 21st century, and this in turn had caused yield-starved investors to seek out financial instruments like collateralized debt obligations. Starting in 2004, the Fed Funds Rate rose from 1% to more than…...

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References

Lewis, M. (2010). The Big Short. NY: W. W. Norton.

Young, M. R., (2008). Both sides make good points. Journal of Accountancy, 205(5), 34.

The Subprime Crisis There were a number of factors that led to the subprime crisis: Fannie Mae, Countrywide Financial, the Federal Reserve, Moody’s, Merrill Lynch, Bear Stearns, Goldman Sachs, AIG, Michael Burry, who shorted the mortgage backed securities being sold to investors that were full of subprime—and guys like him (the ones depicted in Michael Lewis’s The Big Short)—they all had a role to play in the subprime crisis of 2007-2008 (McLean, Nocera). But, truth be told, the lead-up to the crisis started well before the actual collapse of the market. It started with housing in the 1990s. But one could even go back further to the 1970s when Lewis Ranieri of Salomon Brothers invented the mortgage backed security (MBS)—a bond made up of thousands of home mortgages that were bundled together, sliced up and sold to investors who would collect the interest (Lewis). It was a way for the original…...

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Works Cited

Lewis, Michael. The Big Short. NY: W. W. Norton, 2010.

McLean, Bethany and Joe Nocera. All the Devils are Here: the Hidden History of the Financial Crisis. Penguin, 2011.

Goldman Sachs & Co. and Fabrice Tourre were charged by the SEC in 2010 with “Fraud In Connection With the Structuring and Marketing of a Synthetic CDO” from the 2007 subprime mortgage scandal at the heart of the financial crisis of 2007-2008 (SEC, 2010). The specific charge was that the bank and Tourre made material misstatements and omissions in connection with a synthetic collateralized debt obligation that the bank had structured, marketed and sold to investors. The synthetic CDOs were linked to the performance of the subprime housing mortgage market—i.e., the subprime mortgage-backed securities identified by Lewis (2010) as triggering the wave of financial distress that led to central banking intervention (unconventional monetary policy—also known as quantitative easing) and the inflation of asset bubbles currently seen today (Huston & Spencer, 2018). Goldman Sachs settled with the SEC and agreed to pay $550 million on the condition that the bank not…...

financial crisis a "crisis of capitalism?
Compare and contrast the theories of Susan Strange, Karl Polanyi and Giovanni Arrighi. Explain how three of them accessed issues of Financial crisis and its relationship with capitalism

Starting from 2008 onwards, we are currently experiencing an unremitting state of economic recession. Each of the three theorists stated in this essay have different perspectives of whether or not the recession indicates crises of capitalism. Whilst Susan Strange and Karl Polanyi have a more optimist perspective on the subject and indicate that rather than crisis, the recession may, in effect, be, in the first case, a misplaced paradigm (or different, tortured perspective) and in the second case, only a slight wrench that necessitates government intervention for amending a temporary situation, Arrighiri sees the situation as indeed manifesting something that is intrinsically, irremediably, and inherently wrong in the structure of capitalism itself. Each of these views will…...

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References

Giovanni Arrighi (2000) Workers North and South) in C. Leys and L. Panich, eds., The Socialist Register. London: The Merlin Press

Giovanni Arrighi (1996). Capitalism and the Modern World-System: Rethinking the Non-Debates of the 1970s"

 http://www2.binghamton.edu/fbc/archive/gaasa96.htm 

Giovanni Arrighi (2001) Braudel, Capitalism and the New Economic Sociology, Review, XXIV, 1

Local Governments: Challenges and Innovations

Introduction

Local governments play a critical role in delivering essential services, fostering economic development, and addressing community concerns. However, they also face a myriad of challenges that can hinder their ability to effectively meet the needs of their constituents. This essay will explore some of the key challenges confronting local governments and discuss innovative approaches to address them.

Fiscal Constraints

One of the most pressing challenges for local governments is fiscal constraints. Many municipalities are experiencing stagnant or declining revenue streams due to factors such as the global financial crisis, population shifts, and reduced state and federal aid. This....

Globalization and Economic Interconnectedness

Globalization, the interconnectedness of nations and peoples through trade, finance, and communication, has profoundly influenced the economies of the world. It has fostered a complex web of interdependencies, leading to a more interconnected and interdependent global economy.

Trade and Investment

Globalization has broken down trade barriers and reduced transportation costs, leading to a surge in global trade. Multinational corporations have established production facilities and supply chains in multiple countries, creating dense networks of trade flows. Countries have specialized in producing goods and services where they have a comparative advantage, leading to greater efficiency and lower consumer prices. Foreign direct....

The 2008 financial crisis had a significant and widespread impact on global economies and banking systems. Some of the key impacts include:

1. Economic recession: The crisis led to a global economic recession as financial markets collapsed and lending froze, leading to a sharp decline in GDP growth and widespread job losses.

2. Banking system failures: Many banks around the world collapsed or required government bailouts to survive, leading to a crisis of confidence in the banking sector. This also led to increased government regulation of the banking sector to prevent future crises.

3. Stock market crash: The crisis caused stock markets to....

The Profound Impact of the 2008 Financial Crisis on Global Economies and Banking Systems

The 2008 financial crisis, widely acknowledged as the most severe financial upheaval since the Great Depression, left an indelible mark on global economies and banking systems. The crisis's origins can be traced to various factors, including the subprime mortgage debacle, excessive risk-taking by financial institutions, and inadequate regulatory oversight. Its effects, however, reverberated far beyond the financial sector, affecting businesses, households, and governments worldwide.

Impact on Global Economies

The crisis triggered a deep and prolonged recession across the globe. Economic growth plummeted, unemployment soared to alarming levels, and international....