Global Financial Crisis: Impact, Challenges & Way-out
Published: 2010
Author(s) Name: Nand Dhameja
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Abstract
The financial crisis, in a way, is a
reflection of the imbalance between
the growth of real and financial
sectors. Easy availability of housing
loan led to unprecedented
levels of debt, three times the GDP
in the US and Europe. Repayment
defaults due to bubble burst added
illiquidity and caused bankruptcy
and closure of banks and financial
institutions. The crisis is estimated
to have wiped out about one-third
of the value of world’s companies,
and millions of employees lost their
jobs or were pushed to extreme
poverty. Measures to overcome the
slowdown included stimulus packages
of about ten trillion US$ for
banks and guarantees to depositors;
and also enhanced public
spending. The downfall has stopped
with a ‘V’ shape recovery. Is the
short-term recovery sustainable?
Keywords : Financial crisis, Measures to overcome slowdown, recovery
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