GLOBAL FINANCIAL CRISES

By
MUHAMMAD RIZWANULLAH

m.rizwan@iqra.edu.pk | IQRA University

 Long Term Capital Management (LTCM)

What about the rest

$4.8 billion in Mid of
Hedging Funds and Story of only 1 com- of 9000 hedging
1998 to $600 Million
Short term lending pany companies and their
in Sept 1998
$2.8 trillion assets?
 Reasons of Financial Crises
Great Depression of 2007-08 is Not New
 Reasons of Financial Crises

Excessive
Unhealthy ex-
Lending for Low quality of Macroeconomic
pansion of
maximization of collateral imbalance
credit volume
Profit

Ease availabil-
Assumption of Transferring the
ity of credit vol-
“Too big to fail” risk of default
ume
George Soro – Financial Analyst, Businessman and Philanthropist
Derivates – Time bombs of economy

Warren Buffet - Business Magnate, Investor, and Philanthropist

Derivatives - Financial Weapons of mass destruction
Risk Transfer Mechanism Risk Sharing Mechanism

Only Exist in Islamic Finance