Steps taken to counter

Subprime Crisis
Agenda
Pics
Summary
Steps Taken By USA
• Program to buy Treasury securities worth $300 billion.

• To push down mortgage rates Fed plans to buy $1.25

trillion worth of securities issued by mortgage finance
companies Fannie Mae and Freddie Mac by the end of the
year.
• $787-billion economic stimulus package as well as a series
of massive lending programmes to help revive the banking
sector.
• The target range for bank lending rate is zero to 0.25 percent.

• The central bank held interest rates steady at record lows, with a
closely watched bank lending rate near zero.
 Steps Taken By Japan
 The growth comes after 4 consecutive quarters of contraction

 Massive government stimulus

($260 billion) helped to boost

the economy.
 Cash handouts, subsidies to

buy energy efficient cars etc.

Japan’s recovery hinges largely on its overseas markets, which are

showing signs of stabilizing

Overall exports up 6.3% during the quarter due to increase in the

demand from China.

Emergency Guarantee Programme to prevent bankruptcy in

rural areas.
The shift in the power from LJP to DJP will be a relief; but it

might just create instability during crucial times of economic

recovery.
 The recovery may not be sustained once the $ 2 trillion in

worldwide stimulus that propped up sales for exporters runs out.

 40 % of the factories still sit idle forcing them to cut cost and so

slay off employment.

 The growth we’re seeing is based on government spending and a

rebound from the very low level in the previous quarter.

Steps taken by Europe
 Stronger exports and consumer spending, as well as government

stimulus packages, contributed to the growth.

 France and Germany were less hit comparatively because

financial sectors account for smaller proportion of their

economy.
 Growth is boasted by the fact that imports fell shortly.

 The situation is still fragile with investment banks and stock

prices
Steps taken by France and Germany
FRANCE GERMANY
Household consumption It went into recession because

increased by 0.4%. exports collapsed.

Exports have grown at the rate of
Government incentive
7% due to growth in the demand
schemes for trading in old cars,
from China.
together with falling prices,
Imports declined sharply than
were helping consumers.
exports.
Foreign trade contributed
Increase in household and
0.9% to the GDP figure.
government expenditure.
Steps taken by Australia
 Govt . has given a stimulus package of $26.5 billion for

infrastructure projects and cash supports for lower income

families.
 Providing an impetus to private investors for a public private

partnership (PPP).
 Australia's central bank has cut interest rates from 7% to 3.25%

and also reduced petrol prices.

 Plan aimed to support 90,000 jobs while boosting economic

growth
The stimulus package boosted public spending to a
mammoth $19.3 billion.
Retails sales went up .
http://www.scribd.com/doc/8154566/Recession-in-In
dia