Reasons For The Year / 08 Deepened Financial Crisis Of The...

Explain the reasons for the 2007/08 deepened financial crisis in the European Union (EU) and critically assess its response to its crisis. Introduction As a whole, the regulation of banking institutions and financial markets are considered as a debatable issue. Banking is considerably the most deeply regulated industry within the financial sector which is also one of the heavily regulated sectors in the economy. Many financial systems are disposed to periods of lack of stability. However, in the result of the crisis of 2007, in the approaching years the financial regulatory authority has reflected on how to approach the supervision and financial regulation. I am going to discuss the reasons for the deepened financial crisis that occurred†¦show more content†¦When financial markets fail to work effectively, it causes contractions in economic activity. (Mishkin et al., 2013). Casu et al. (2006) say that in recent years, many financial crisis around the world have carried about a large number of bank failures which led to agreements for more effective regulation and supervision. Whereas some blame crisis for failure in regulation. Activists of ‘free banking’ argue that the financial sector would work better without regulation, supervision and central banking. (Casu et al., 2006) Financial crisis usually would occur due to banks creating too much money, too quickly and using it to push up house prices and speculating on financial markets. This is exactly what happened which caused the 2008 crisis as mortgage brokers got bonuses for lending out more money but that encouraged them to make risky loans which hurts profits in the end. This led to moral hazard, when one person takes on more risk because someone else bears the burden of that risk. Banks and lenders were willing to lend to subprime borrowers, those with poor credit history, because they plan to sell the mortgages to somebody else. Once banks started to notice that subprime loans were defaulting, they started seeing trouble meaning that they had to then worry about housing market prices as it was never an issue before. (DeGrace, 2011) People thought they would pass the risk of the line. Going back to moral hazard, the

Flashlight free essay sample

My only source of light I had was a flashlight clutched in my small hands, flicking around the pink tent in which I was holed up inside. I heard a small ruffling coming from outside the tent and I jumped, facing the flashlight towards the sound. It was only my small teddy bear, falling over on its side. I sighed a breath of relief and turned my flashlight from Beary Johnson, only to hit a dark figure outside my tent. I let out a shriek and covered my head with my arms, the flashlight flinging from my hand. There was a loud laugh and the sound of my tent being unzipped, â€Å"Tay, it’s only me.† I looked up warily to see only my dad’s head through the tent. I rubbed the tears out of my eyes and crawled to him and he swooped me up into his arms. â€Å"I would never let a scary old monster snatch you,† he said, carrying me to the couch, â€Å"That’s my job. We will write a custom essay sample on Flashlight or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page † He suddenly began tickling me with a fake monster voice and I was laughing to the point I was crying. I remember those summers spent with my dad, running around the house, screeching blissfully as he chased me around the sharp corners and watching Jumanji for the third time in a row that day. Those were times I cherished greatly; leaving Virginia and my mom for a summer full of fun and excitement. My dad spoiled me beyond my greatest 5-year-old dreams. We would go to water parks, get soft serve every day, go shopping for whatever I wanted needless to say, I loved summer. And after my summer with my dad was well spent, I would return back to my mom. I would always be able to adjust easily, flowing comfortably back and forth between parents, just knowing that I had both of them. When anyone asked where my home was, I always had two answers for them. My parents separation had become as normal for me as a fluffy multi-layered pink and black Hello Kitty skirt with matching knee-high Hello Kitty socks and light-up sketchers. It was my routine. But it was the summer of 2011 my schedule was flipped upside down and I never returned to Virginia at the end of the summer. Being kept from returning to Virginia forced me to grow up. I learned that life wouldn’t always cater to me. I was scared beyond belief that my entire world was turning on its axis, that everything I had come to know was crumbling all around me. It was an extremely hard time for me, learning to adjust to a new life, and going to a school where I knew no one. I spent every night calling my mom on the phone, asking her when I would see her again, tears running down my face. It took me some time to get used to living in Florida. I met tons of people, I stepped out of my boundaries and did things I was never able to do in Virginia. I roller skated with my friends and had grand birthday parties I had once dreamed about. While I missed Virginia and my mom, I adjusted to life in Florida and overcame my sadness and fear. It was a huge change and hadn’t come to me easy, but it helped me become the person I am today.