Did the FSA do enough to prevent the 2008 financial crisis Dissertation

Did the FSA do enough to prevent the 2008 financial crisis - Dissertation ExampleThe primary factors that direct to this economic downturn were the failure of the FSA to appropriately monitor various financial transactions the failure of the three-party arrangement for financial stability amongst Treasury, the infirmity of liquidness management in spite of appearance the Bank of England, a pretermit of commensurate provisions for deposit insurance, and a banking sector with exiguous regulations for insolvency. This article will examine the personality of this economic crisis with special focus on exploring the contention that the FSA was major factor in causing this mart crash owing to its policy of non-intervention where it did not do enough to prevent the 2008 financial crisis. 1 insertion The financial crisis in 2007-09, which is the worst economic downturn since the times of the Great De constringeion, initiated in the US sub-prime mortgage market, from where it spread acr oss the globe at an unprecedented rate, affecting almost all the markets in the globe (Mohan, 2010, 3). In early 2007, the US investment banks and the mortgage backers operating within the sub-prime mortgage markets started feeling the tremors when they face problems from the defaulting debtors who were failing to repay their loan owing largely to the spiralling interest rates. Soon these financial institutions comprehended the point of their debt and the overshooting of their limits (Cable, 2009). This ripple in brief spread to Europe, and in 2007 in UK, the Northern Rock faced with market liquidity crash, and failing to find any private takers was finally nationalised by UK government (Ibid). In US, the Federal military reserve started lowering the loan interest rates in order to avoid large-scale financial defaulters in the market. Despite this, by 2008, there were a large number of cases of failed banks, starting with the insolvency of Bear Stearns, an investment bank. Thi s was soon followed by large-scale bailouts of the mortgage backers by the US government, for well know financial institutions like, Freddie Mac and Fannie Mae (Gamble, 2009). in spite of appearance one year, by early 2008, it was evident that the financial crisis was not limited to just the subprime mortgage markets, tho had affected the entire financial system (ibid), and had been primarily caused due to the manner in which financial debts were converted into an intricate web of various securities, and then traded with other financial institutions (ibid). Thus, what had started as a small crisis within the housing mortgage market, transformed into a catastrophic banking disaster, seriously affecting primary the financial systems of US and Europe (both at domestic and international levels). Though the crises the global in nature, it was noticed that despite the Asian and LATAM emerging market economies (EMEs) suffering bad setbacks from the crisis, the basic financial system of t hese countries remained comparatively stability. The economic crises failed to affect any of fundamental financial institutions in these countries, thus making the economic downturn as being more of a North Atlantic financial crisis instead of a global one. A press report in 2007 stated that it was necessary to draw up radical proposals to improve transparency in financial markets and to change the way credit rating