o n t h e

l u a t i on
An E v a C r i s i s
na n c i al
l d F i
Wor
Based on:
‘Murder On The Financial Express’
&
‘Can An United Asia Overcome A Global Crisis?’
Presented by
 An Evaluation on the World
Financial Crisis
1
1 What is a Financial Crisis?

2
2 Symptoms of a Financial Crisis

3
3 What triggered Global Crisis?

4
4
Factors contributing to the Crisis (PESTEL Analysis)

5
5 Implications for global financial markets in the future

6
6 Q&A
 What is a Financial Crisis?
A sharp deterioration of a group of financial indicators, such
as short‐term interest rates and asset prices, potentially also
accompanied by failures of financial institutions.
 Symptoms of a Financial Crisis
Decline in Economic activity – reduced money circulation

Collapse of Large financial institutions

Failure of Key Businesses
Downturn of stock markets around the world

Sky Rocketing Interest Rates (lending)

Huge decline in the real estate and other asset values
Increase in unemployment and decline in consumer wealth

Social unrest
 What triggered Global Crisis?
THE US CREDIT CRUNCH
&
FINANCIAL CRISIS
The US government Housing Policy

Low Interest Rates

Mortgage Backed Securities (MBS)

Human Greed

Speculation
P E S T E L
ANALYSIS
 P olitical
Promoting Liberal Market Policies
Flexing Banking Regulations
Pressure from Government to expand Mortgage Loans (Fanny
Mae)
Government strong encouragements for home ownership
 E conomic
Low Interest Rates
Increase in Sub-prime mortgages
High Risk lending Supported by Government backed i-banks
 S ocial
Lack of knowledge about financial instruments

Spendthrift Life Styles

Panic Saving – Planning for the worst
 T echnological
Advance communication systems – Creating Unrest
Increase of Internet based Credit purchasing
 E nvironmental
World Environmental Natural disasters – which lead to
Government reserves to be utilized
 L egal
Deregulating the Financial Markets
Increase of i-bank IPO’s
Lack of Financial product safety.
 Likely Implication for the Global
Financial Markets.

Devaluations of currencies
Decline in stock market
Job losses/ factory shutdown due to declining demand in the
west and USA
Social unrest
Tendency for more saving despite new investment
opportunities specially in the Asian markets
 Likely Implication for the Global
Financial Markets… Cont

Focus of developing regional ties

Tendency to make existing regional associations broader attracting
powerful nations
Introduction of regional monitoring bodies to monitor and
potentially coordinate macro economic and exchange rate policies
Regional integration to create better bargaining power.
 Future Plans

Regulated structure for financial markets

Need to boost the confidence on all stake holders about financial
institutions

Setting up global monetary funds to protect the economies of worst

affecting nations.
Associations for regional cooperation (eg: ASEAN)

Setting up of regional reserve pools (To fund bailout plans)