Economic Global Crisis The root of the economic global crisis is subprime owe crisis (2005-2008) in the US. The impacts were the pick of RBS and Northern Rock in UK, devote of Merryl Lync, Pimco, BOA, HP AIG AND Merryls Lynch and Lehman brothers in US, and entirely financial institutions round the valet got affected due to globalization made them co-ordinated and created cascading strength to non financial institutions. It started from the US president bush-league from country companionship (capitalist economy) replaced Clinton from democrat party (socialism) in the end of 2000. Bush was tenseness on the free market and de ruler by bring d take in the interest rate, reduce the credit requirement and modify the low income and no credit history to borrow nones to get own house, it called subprime mortgage. It is really risk of infectiony and those shifted the risk to all hoi polloi by shifting the subprime mortgage to owe Backed bail (MBS), sold to the se condary market and unusual and local investors bought it since it is guaranteed by Fannie Mae and Freddie Mac which are established by US Government.
The hassle came when the interest increased (in 2005-2006) and the subprime borrowers default and it lead to increase in house price since low guide and many supplying (no liquidation) and it harmed all the investors (local and foreign financial institutions) all around the world until right now since US does not have regulation system to control the subprime mortgage crisis. USs citizen is the nigh consumptive and the least saving in the world and it lead to high rate in acquire (same habit same other countries). At the glance, i t seemed the failure of capitalism but it wa! s not since the subprime mortgage was to create distribution of wealth (humanism) and the existence of important bank and Fannie Mae and Freddie Mac also the indorse of the socialism. One of the settlement is to implement shariah economy system (investment in real sectors , communion profit and loss) which...If you want to get a full essay, piece it on our website: OrderEssay.net
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