FSAs Role towards the Collapse of Global Financial Services Industry Essay

FSAs Role towards the Collapse of Global Financial Services Industry - Essay Example It resulted in the failure of the key businesses, downturn in the economic activity directing to the 2008-12 global recessions and the decline in the consumer wealth. During this period economies globally slowed, as international trade declined and credit tightened. The explanation of the financial crisis is that hasty loans in the form of mortgages were made to people who do not have any possibility of paying them back. These loans were enclosed up into exotic financial products that were specified with high ratings by credit rating agencies, and were sold to investors thus looking for high yields at low risk. When default on the mortgages began to grow in large numbers, it led to unexpected losses on the products. A chain of bankruptcies, government providing emergency credit lines, balance sheet write downs, insurance and nationalisation of several institutions followed. Investors were inattentive in their understanding of what they were actually purchasing and sub-prime borrowers were insincere in taking out loans that they should have known they could not finally meet the repayments on. The crash reveals a quick drying up of liquidity following a huge expansion in credit issued to consumers and financial institutions in a number of countries. The investors have suffered harsh experiences with currency attacks and collapses, thereby negatively affecting the balance sheet of their financial institutions and corporations due to high degree of liability dollarization, therefore deepening the crisis further. Enormously disruptive to economic development and growth, in emerging market economies, these experiences have made policy makers aware of the massive cost that they have to bear by participating in the financial globalization process. By the middle of 2007, over dependence on market forces without proper regulatory systems and mechanisms in place to govern the globalization process led to emergence of huge cracks intimidating the stability of world economy on the two fronts: global financial crisis and the sharp increase of the primary commodity prices. The commodities have registered a sharp rise in prices in 2007, with extreme volatility. The increased prices of commodity hit the world when most Western economies were making effort to get away from recession and a sharp economic downturn amidst the credit crunch that had engrossed the financial institution and markets in the Western Europe and United States. There was a huge fear that the on-going financial crisis may turn into global depression of the 21st century. However, Central banks and governments responded with monetary policy expansion, unprecedented fiscal stimulus and institutional bailouts. Having lost room for additional interest rate cuts like a monetary policy instrument, most of the Central banks have engaged in hostile quantitative easing, through purchasing commercial securities and government bonds and generating an asset in the central bank account against which bank lending can be continued. By increasing money supply through this channel, it is expected to re-establish confidence in financial markets and institutions and unlock frozen credit lines. This paper will focus on the role of UK Financial Services Authority (FSA) for the reform of financial markets in the UK. It will lead to the build-up of the UK economy and the international economy. Effects of the Global Financial Crisis on UK Economy The effect of the financial crisis is on both the commercial and residential property markets in the UK. Over the first half of 2008, the economic activity in the UK had slowed down, thereby reaching at decline stage by the end of second quarter. Initially the government investment has provided some stimulus but

How can social media be used as a powerfful marketing tool in a small Research Paper

How can social media be used as a powerfful marketing tool in a small business (Using case study) - Research Paper Example rough interview with the owner of the business as well as looking into the financial figures derived from their sales and comparing them from the time she used traditional word-of-mouth marketing to the time she already used Facebook as a marketing medium. The findings prove that since posting pictures of her children’s clothes in her Facebook page and setting up one for TCC, the business’ sales has grown by 150% in just nine months. The profit increase is evidence that Facebook is an effective marketing medium for a small business. The internet has evolved to be a powerful tool that can be used for a variety of purposes. Being known as the information highway without leaving one’s home, it provides users with a vast range of sources of information that allow them to find answers to any question in one click. Even businesses have boomed with the utilization of online advertisements. Currently, social media has likewise hopped on the marketing bandwagon, offering their sites as platforms for selling products and services in a myriad of ways. Research Objective: This paper will show how small businesses can maximize social media to make their business grow. It will focus on a small dress shop in London started by a young woman who worked from home and decided to sell the dresses she made for children online using her Facebook account. The shop’s name is Twinklestars1. Marketing goods and services online has been ongoing for many years now. Berthon et al. (1996) explain that potential customers begin with their search for a preferred product when they surf the internet. Businesses which have established their website presence are more likely to attract customers as long as they keep their sites dynamic, with their advertising designs and texts consistently updated so they sustain the interest of their customers (Durkin & Lawlor, 2001). Apart from the use of computers, mobile devices have stepped up to include features that access the internet, widening