Name: Jalod P.

Hadji Amer

Course: ACT 171*5

GLOBAL FINANCIAL CRISIS 2008

As I have learned from the source that I have read, the year of 2008 became the year for
the crisis referred to as the “Great Recession” or global financial crisis – which refers to the
major financial crisis that the world faced between 2008 and 2009. The financial crisis had hit
individuals and institutions around the world, especially millions of Americans. Financial
institutions began to decline, many were acquired by large corporations, and the US government
was forced to provide bailouts to bring many financial institutions to the surface.

The great recession happened around the year 2007 when banks and lending institutions
encouraged many homeowners to take out loans that they couldn`t afford. Lenders created new
financial instruments called mortgage-backed securities (MBS). Outdated regulations allowed
lenders to get sloppy with underwriting, meaning the actual value of the securities could not be
established. As a result, Subprime mortgage bundles led to the 2008 financial crisis. Banks began
to lend recklessly to families and individuals without true means to follow through on the
mortgages they had been granted. Such high-risk (subprime) loans were then inevitably bundled
together and passed down the line.

Due to this, the housing market was deeply impacted, leading to millions of foreclosures
and evictions. The government stepped in to bail out banks; this led to a series of bailouts and
mergers that helped stimulate the economy.

In the Philippines, the effect of the global financial crisis was also felt, negatively and
positively. On the negative side, some Overseas Filipino Workers working abroad were laid off
by companies. Some companies got bankrupt, and Filipinos abroad were forced to go home
because of the companies’ situation. Banks were affected by this crisis, there were few banks in
the Philippines who have exposure to the global crisis around 10 billion pesos.

On the other hand, on the positive side, after the global financial crisis happened, some
international companies relocated their service hubs in the country, Knowledge Process
Outsourcing (KPO) for an instance, which is one of the lucrative places to workplace to work if a
person has a zeal to learn and having problem solving skills and work in time, bound project and
commitment and positive attitude. A candidate of KPO can earn good salary upon the
performance and the domain of the work. It was the best shot for the Filipinos who were striving
for better opportunities, wherein, they would not need to work abroad for compensation
competency since the opportunity has been established in the country.

In my own perspective, Global Financial Crisis was not really a bad impression. It
benefited the firms, in a way, it paved a lesson: every step must have to evaluate upon deciding.
When we grant something to someone; we think, analyze, and reflect for our benefits.
Furthermore, the great global recession would not mean anything for no reason. It became a
model to look back at the mistakes and to outlook positively in the future, hence, the saying:
History is a model to learn from.