Impact of the Global Financial Crisis on Indian Economy

Background of the Global Financial Crisis; What is it only(a) about? It all began with the one and all American dream, that every American should encounter a home. Regardless of who you are and what you do, if you are an American, you should have something called a home. Real estate of the realm business was in a boom, and financial agents thought that there wasnt a better epoch to give away loans. The Household sector was given a boost with increased monetary supply by mercantile financial companies, and people were given loans regardless of the credit entry range they received. It was never expected that the boom in the Real Estate business would come to such an abrupt end, and the prices would reach all time low. The US economy being a capitalistic driven economy didnt bother to indulge itself in the policies pursued by the then prominent financial giants. stepwise these financial giants in this business started feeling the heat as sub-prime clients started defaulting in their repayment of loans. The properties which were mortgaged by the clients werent eventide covering the principal amount of the loan, leave alone the care commitments.

The credit offered to the people in indiscriminate fashion, achieving short status goals and ignoring warnings from leading economists about long term sustainability of the policy, backfired completely and companies manage Lehmann Brothers, Merill Lynch, Freddie Mac and Fannie Maes bad assets reached magnanimous proportions. An acute credit shortage was experienced in the economy, and simultaneous negative do started occurring. The credit crunch meant that borrowing interest straddles hired gun up in the market, companies slowed down their investment policies, production declined, draw offs increased, consumption decreased and the whole economy followed the downward spiral. The unemployment rate in the US reached an all time high of 6.1% and industrial growth saw its largest decline in the past common chord years and fell to 1.1%. The US governments realized the... If you want to get a full essay, order it on our website: Orderessay

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