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Global Recession and Its Impact on Indian Economy

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Global Recession and Its Impact on Indian Economy
ABSTRACT GLOBAL FINANCIAL CRISIS AND ITS IMPACT ON INDIA

NAMES OF AUTHORS * Professor SWAPNILSONY.N. SINGH
Assistant Professor, DAMS, G.S.College of Commerce, Wardha,
Maharashtra.
B.SC., M.B.A.
Phone No: 9881683767 e- mail: swapnilsony_flyingtigress@yahoo.com

* Professor K.V.SOMANADH.
Assistant Professor, G.S.College of Commerce & Management, Wardha, Maharashtra.
M.Com. M.B.A... NET. M.Phil., (Ph.D.)
Mobile No: 807787321. e- mail: somrada_kolluru@yahoo.co.in

ABSTRACT

GLOBAL FINANCIAL CRISIS AND ITS IMPACT ON INDIA

*Professor SWAPNILSONY.N. SINGH **Professor K.V.SOMANADH The global financial crisis originated in United States of America. During booming years when interest rates were low and there was great demand for houses, banks advanced housing loans to people with low credit worthiness on the assumption that housing prices would continue to rise. Later, the financial institutions repackaged these debts into financial instruments called Collateralized Debt Obligations and sold them to investors world-wide. In this way the risk was passed on multifold through derivatives trade. Surplus inventory of houses and the subsequent rise in interest rates led to the decline of housing prices in the year 2006-07 which resulted in unaffordable mortgage payments and many people defaulted or undertook foreclosure. The house prices crashed and the mortgage crisis affected many banks, mortgage companies and investment firms world-wide that had invested heavily in sub-prime mortgages. Different views on the reasons of the crisis include boom in the housing market, speculation, high-risk mortgage loans and lending practices, securitization practices, inaccurate credit ratings and poor regulation of the financial institutions.

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*Assistant Professor,
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