In order to fully understand the role manage by Australian financial institutions in preventing further events much(prenominal) as those witnessed in the US in middle 2007, where cases of incorrupt opportunity in the financial banking system led to the greatest scotch downturn since the great depression of the 1930s (REF), we moldiness number one examine the causes of the international financial crisis to understand how and why it occurred and what measures force out 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 stipulation economic 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 come up big to fail began to collapse due to a sloppiness in liquidity (REF). Although the collapse of major financial institution s in the US and later throughout the world appe ard to have happened precise rapidly and seemingly without significant warning, we can now halt way the business practices in the issue leading up to the GFC that are responsible for such a failure. The US living accommodations securities industry went through a period of keep addition from 1963-2007 where the expense of an average house grew from USD$19000 to USD$313600 respectively (REF #2).
In the ex prior to the collapse of housing worths in 2007, the average price of a house grew 174% to the pre GFC height of USD$313600 in early 2007 (REF #2). moreove r during this period Americas GDP growth was! diminish with an spy average growth 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 incessantly prices in housing where increase at a rate which had never before been observed, the make to the continued growth in housing prices was due to the ever change magnitude demand of new housing, this was fuelled by the accessibility of easy deferred payment to lenders who required a mortgage, however the standards...If you command to get a full essay, order it on our website: BestEssayCheap.com
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