Global Financial Crisis

The panic started in September 2008 when Lehman Brothers and other banks close down. Experts have been predicting this to happen before September 2008 and it was published in business journals.  The journals have been commenting on the financial situation of leading US and European banks, mortgage banks and insurance firms. It started with the failure created by the wrong application of risk controls for unpaid debts and collateral of debt insurance. Credit crisis was being faced by large financial institution in the Europe and United States and it slowdown the economy of the country. It created global shock that resulted in bank failures in European and the stock indexes declines and the equities and commodities market value shows large reductions. It allows the Federal Reserve to pay interest on excess of the reserve requirement balances deposited from banks, that removes the incentive for banks to be able to extend the credit instead of placing cash on deposit with the FED. Today the market is complex and sophisticated, what are new here are the circumstances and consequences of the current collapse.

The financial market is a global phenomena and UK is also suffering the same way the small countries is experiencing. UK started the financial market and it is collapsing right now. The collapse of the global markets and global trade is a sign that the end of the trade is coming. Because of the global crisis trade markets are affected and they are having a hard time overcoming the crisis. Businesses are closing down since it is the only way they can do for the moment.