Australia and Gfc

In order to fully understand the role call for by Australian financial institutions in preventing further events much(prenominal) as those witnessed in the US in middle 2007, where cases of incorrupt stake in the financial banking system led to the greatest frugal downturn since the great depression of the 1930s (REF), we moldiness offset examine the causes of the planetary financial crisis to understand how and why it occurred and what measures buttocks be taken to prevent a absorb of such(prenominal) a global catastrophe. In the lead up to the global financial crisis (GFC) the US had welcomed a flowing of farsighted precondition stinting result lasting almost 25 eld precedent to the financial meltdown occurring in mid 2007(ref #1). ruinous failures began to happen as financial institutions previously considered as rise big to fail began to collapse due to a lose in liquidity (REF). Although the collapse of major financial institutions in the US and later throughout the world appe ard to have happened in truth rapidly and seemingly without significant warning, we can now relent way the business practices in the blockage leading up to the GFC that are responsible for such a failure. The US lodgement securities industry went through a period of keep reaping from 1963-2007 where the expense of an average house grew from USD$19000 to USD$313600 respectively (REF #2).

In the ten-spot prior to the collapse of housing prices in 2007, the average price of a house grew 174% to the pre GFC height of USD$313600 in early 2007 (REF #2). hitherto during this period Americas GDP growth was lessen with an spy average gro! wth rate over the period 1998-2007 of 3%, falling from 4.4% in 1998, to 1.9% in 2007 (REF 1). The US economic growth was slowing how ever so prices in housing where increment at a rate which had never before been observed, the key fruit to the continued growth in housing prices was due to the ever change magnitude demand of new housing, this was fuelled by the availability of easy deferred payment to lenders who required a mortgage, however the standards...If you indispensableness to get a full essay, order it on our website: OrderCustomPaper.com

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