際際滷

際際滷Share a Scribd company logo

The Global Financial Glitch of 2007-'08 (A Brief Overview)

Download as PPT, PDF
Arnav Pati
Arnav Pati

A brief introduction about the global financial breakdown that made many economies to stumble over and a few major implications that followed this crisis. I've also laid down few major points of policies that the Indian Govt. took back then to retaliate to this glitch. By Arnav Pati from Utkal University, Odisha. (Masters in Analytical and Applied Economics).

1 of 10
Download to read offline
THE GLOBAL FINANCIAL GLITCH 2007-08 BY ARNAV PATI EXAM ROLL NO. 10120V133 005 UNDER THE SUPERVISION OF Dr. (Mrs.) APARAJITA BISWAL
Why it happened? A. Subprime Mortgage Crisis: banks would keep on lending to customers with low credit worthiness B. Housing Bubble: rapid increases in valuations of real property such as housing until they reached unsustainable levels and then decline
The Global Financial Glitch of 2007-'08 (A Brief Overview)
What effects did it bring upon? A. Thousands of job-cuts to reduce costs-to-foreign companies B. Drastic downturn of stock-markets as investors lost their investments recapitalising their firms followed by deep business pessimism C. Affected developing nations through capital account balances and foreign exchange reserves D. Hence developing economies struggled with sluggish overall growth and consequently unfavourable macroeconomic indicators
Was India affected? A. Yes unfortunately India was affected by the financial breakdown in the US B. India got affected in 3 ways: 1. Financial markets: stock markets have foreign investors or foreign clients of domestic firms 2. Trade flows: The FIIs withdrew money from India to recapitalise their financial bankruptcy 3. Exchange Rates: The Indian Rupee lost its value relative to the strengthening Dollar as firms started to buck up
The Global Financial Glitch of 2007-'08 (A Brief Overview)
The Global Financial Glitch of 2007-'08 (A Brief Overview)
How did the Indian Government tackle this crisis? A. To loosen the monetary policy, the RBI injected liquidity by: 1. lowering CRR from 9% to 5% 2. lowering Repo Rate from 9% to 4.75% 3. lowering Reverse Repo Rate from 6% to 3.25% 4. resorting to Open Market Operations (outright purchase of government securities in the secondary market) B. Increasing farm loans and credit financing windows for SMEs C. A large food and fertilizer subsidy bill was introduced
References A. Amit P. Shahs Article on The Global Meltdown 2007 featured on the NY Times B. Investopedias links on Bad Investing. C. Historical Stock Exchanges Data from BSE India Website D. RBI Weekly Statistical Data 2006, 2007, 2008 E. The US Census Bureau Statistics Data
THANK YOU

More Related Content

The Global Financial Glitch of 2007-'08 (A Brief Overview)

  • 1. THE GLOBAL FINANCIAL GLITCH 2007-08 BY ARNAV PATI EXAM ROLL NO. 10120V133 005 UNDER THE SUPERVISION OF Dr. (Mrs.) APARAJITA BISWAL
  • 2. Why it happened? A. Subprime Mortgage Crisis: banks would keep on lending to customers with low credit worthiness B. Housing Bubble: rapid increases in valuations of real property such as housing until they reached unsustainable levels and then decline
  • 4. What effects did it bring upon? A. Thousands of job-cuts to reduce costs-to-foreign companies B. Drastic downturn of stock-markets as investors lost their investments recapitalising their firms followed by deep business pessimism C. Affected developing nations through capital account balances and foreign exchange reserves D. Hence developing economies struggled with sluggish overall growth and consequently unfavourable macroeconomic indicators
  • 5. Was India affected? A. Yes unfortunately India was affected by the financial breakdown in the US B. India got affected in 3 ways: 1. Financial markets: stock markets have foreign investors or foreign clients of domestic firms 2. Trade flows: The FIIs withdrew money from India to recapitalise their financial bankruptcy 3. Exchange Rates: The Indian Rupee lost its value relative to the strengthening Dollar as firms started to buck up
  • 8. How did the Indian Government tackle this crisis? A. To loosen the monetary policy, the RBI injected liquidity by: 1. lowering CRR from 9% to 5% 2. lowering Repo Rate from 9% to 4.75% 3. lowering Reverse Repo Rate from 6% to 3.25% 4. resorting to Open Market Operations (outright purchase of government securities in the secondary market) B. Increasing farm loans and credit financing windows for SMEs C. A large food and fertilizer subsidy bill was introduced
  • 9. References A. Amit P. Shahs Article on The Global Meltdown 2007 featured on the NY Times B. Investopedias links on Bad Investing. C. Historical Stock Exchanges Data from BSE India Website D. RBI Weekly Statistical Data 2006, 2007, 2008 E. The US Census Bureau Statistics Data