“Lending Companies and the downfall of the 2008-2009 Financial Crisis” assignment help
finance
Description
“Lending Companies and the downfall of the 2008-2009 Financial Crisis”
OUTLINE
Since the Great Depression of 1929-30, the economy faced another biggest turmoil or
what is being called as the worst financial crisis in 2008. The indications for the arrival of
such crisis began in January 2008 when there was news of drastic fall in the profits of the
Citigroup banking. It had a great impact over the New York Stock Exchange at that time.
Followed the incidence, there was a series of declaration of a number of American and
European banks. All these banks and financial institutions declared massive losses in their
2007 end of the year results.
Later in the same year, a 158 year old investment bank – Lehman Brothers became
bankrupt and the stock broking firm – Merril Lynch was taken over. Such kind of moves and
incidents further increased the intensity of the recessionary situation. During the same period,
there were some moves by Goldman Sacks and Morgan Stanley to get more protection from
bankruptcy. As a result, the government need to step in to stop any further losses in the
economy and it made dramatic interventions in the financial markets. In fact, four other
investment banks and Wall Street all started showing downturn in their performance results at
that time. US banking system were in need of billions of Dollars and its effect started
reflecting into the decline of the real economy. Gradually, the crisis became global in nature
and the entire world once again headed towards the period of inevitable recession. That is
why, it was called as one of the worst economic downturn since the WWII. Next few years
really became difficult for the world economies.
