Global Financial Crisis

Topics: Bank, Finance, Financial market Pages: 9 (2505 words) Published: April 11, 2013
14 September 2012
Adriana Vamvakas
Monash University
avam1@student.monash.edu

Berty Vidanapathirana
Monash University
Caulfield East 3145

Dear Mr. Vidanapathirana,

Enclosed is a copy of the “Major Assignment” discussing the importance financial intermediaries have in an economy. This report is a summary of my findings gathered from books, magazine articles, Monash online database, speeches, newspaper articles and websites. It will explain to both peers and younger generations how financial intermediaries aid the flow of money in the financial world. In this report I will be looking closely at the roles of banks and how they have been affected by and dealt with the Global Financial Crisis. I was able to complete this report on schedule and meet all my proposed objectives within the allocated word limit of approximately 2500 words. In this report you will find background information involving the roles of banks and why they are vital in our day-to-day lives. The report will then follow on to briefly explain the financial issue of 2008, the Global Financial Crisis, and how banks from both Australia and international banks dealt with the serious repercussions. Attached at the end are also some graphs and tables, to aid my findings. Through this research, I discovered that although the financial crisis was global, it was seen through the Australian governments measures that our economy and our banks were able to stay afloat, suffering minor setbacks whilst, unfortunately, many overseas banks, especially in the United States were not so fortunate and resulted in many losses. Should you have any questions and/ or comments regarding my report or research, do feel free to contact me. Thank you for your guidance throughout the semester and I do hope to learn much more from you in the future.

Sincerely,
Adriana Vamvakas

EXECUTIVE SUMMARY
THE IMPORTANCE OF FINANCIAL INTERMEDIARIES

The purpose of this report is to discuss the importance of financial intermediaries, namely banks, and to apply our knowledge of these institutions to a real-life financial market issue like the Global Financial Crisis (GFC).

This report will look at the main roles of banks and focus on how they are vital in the flow of funds. It will then continue to look at how the roles of banks can be at risk when financial market issues arise. For the purpose of this report I will be specifically focusing on the GFC, and the effects of this phenomenon on both Australian and international banking institutions.

In writing this report, the sources of information comprised of books, Monash online databases, magazine articles, speeches, newspaper articles and websites all of which relate to the importance of financial intermediaries and how they were affected by the issue of the GFC. The main findings of this report include:

* the roles of banks in aiding the flow of funds
* specifically looking at the indirect financing role of Authorized Deposit taking Institutions * brief overview of the GFC and how it impacted on banks * the repercussions in Australia, with specific focus on the Big Four * the repercussions in the United States, a comparative view

Overall, we will see how Australia ultimately has quite successfully dealt with the repercussions of the GFC and how our economy continues to flourish.

TABLE OF CONTENTS

An Introduction: The role of Financial Intermediaries …………………………………………………………4-5

Background: Overview of the Global Financial Crisis………..…………………………………………………. 5-6

Impacts on Financial Intermediaries

Global Implications…………...….......………………..…………………………………………....6 Australia’s Banks…...………………………………………………………………………..……….6-7
United States Banks………………………………………………………………………..………..7

Lessons From The GFC For Australian Banks ………………………………………………………………………8

Conclusion ……………………………………………………………………………………………………………….………...9

Bibliography...
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