Financial Crisis

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Financial Crisis

A financial crisis is “an economic recession or depression caused by a lack of necessary liquidity in financial institutions. A financial crisis may be caused by a natural disaster, negative economic news or some other events.”(InvestorWords.com, 2009) Financial crisis usually decrease business activity because people do not have enough financial resources. The reason why I chose this topic is because it is a daily theme in all of the European tabloids. We read every day’s news about bankrupt companies which have big trouble with deficit of work or other companies did not pay them for work. The present financial crisis started in the United States “on black Thursday 26th July in 2007” (Robert, D. & McHugh, Jr., 2007) and turned into a global economic recession in all countries OECD. The worldwide recession, the first since the Second World War, dropped to a “reduction of world gross domestic product by four per cent in 2009”. (Munster, R., 2011)

Graph no.1: This graph refers to the top nine biggest consumers in World (data available at: http://www.wto.org/english/news_e/pres10_e/pr598_e.htm)

Financial crisis formatted by transnational corporation and mass media who we are constantly pushed and persuaded from advertisements to lend money, take loans and live luxurious lifestyles despite not having the financial resources. People are taking loans for absolutely stupid thinks like TV, mobile phones and furniture. Result for them is, they have too many loans and they are not able to pay their mortgage and became insolvent for banks. And also we can identify specific people who are responsible for the financial crisis. ”There are Phil Gram- chairman of the Senate Banking Committee from 1995-2000, Alan Greenspan- The Federal Reserve chairman, Chris Cox - SEC (Security and Exchange Commission) chief, Hank Paulson- Treasury Secretary, Joe Cassano- Founding Member of AIG, Ian Mccarthy- Chairman of Beazer Homes, Dick Fuld- concocted...
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