Discuss the Global Financial Crisis (GFC). You may focus on particular aspects of the GFC. You...

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Discuss the Global Financial Crisis (GFC). You may focus onparticular aspects of the GFC. You may also mention earliersignificant economic and financial crises, and the extent to whichthey presage the GFC

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Traditionally the Investment banking model was like this Partners would bring in money invest it in assets as per their risk appetite and reap the benefits or bear the loss But during 1980s Investments bank went public in the US and now had more money to play with and during that period began the process of deregulation Saving and loan companies were allowed to gamble with public deposits with minimum regulation Wall street lobbied for more financial freedom and Allan Greenspan was appointed as chairman of Americas central bankThe federal Reserve by the then President Ronald Regan and was reappointed by Presidents Clinton and George WBush Consolidation of financial sector was taking place and the financial market was being dominated by few players who were getting bigger day by day and more powerful Banks liked monopoly power and knew when they are too big they will be bailed out in case something adverse happened And during 1990s a financial product called Derivatives was introduced However it made the market more unstable contrary to what bankers and economists believed Now bankers could bet on virtually anything stocks weather crops But the US government did not regulate derivatives under the pressure of lobbying from powerful banks even though Commodity See Answer

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