How did the recent financial crisis affect Financial Markets and Essay

How did the recent financial crisis affect Financial Markets and institutions - Essay ExampleThe difference in interest evaluate has led to different problems and difficulties in the international financial market. Further on, another difficulty was caused by a greater demand for U.S. $ by oil importers olibanum leading to the U.S. $ currency devaluation, the yen Japan, the euro and the pound sterling. Therefore, market and capital markets suffered great losses and it was necessary to find a way out of this situation. At the origin of financial crisis, the American society still had a hope that future elections of the President would facilitate it. Unfortunately, the impact of financial crisis of 2008-2009 still echoes in the worlds economy. There is a tendency to reduce the difference among the interest rates. Moreover, the securities market has been greatly influenced by the devaluation of the assets of certain companies established by banks for impart securitization (Bloom & Schirm, 2010). In the period between 2004 and 2007 the size of loans has increased from 60% in revenues to 90% respectively (Financial Crisis Lets Get to the Root Cause, 2008). Furthermore, a poor management system of the loan system has also negatively influenced on the financial system. In order to facilitate the complexities occurred in the worlds bank and financial system it is mathematical to work in two main directions continue frugal accounting real, if only the existing level now being maintained and involve as many as possible capital in the economy (Kuttner, 2009). In order to renovate a proper functioning of investment banks, such as Lehman Brothers, Merrill Lynch and American International Group (AIG), the U.S. government invested $85 billion in this sphere (Trussel & Rose, 2009). Unfortunately, banks of the country have fallen apart like a house of cards. Almost nineteen banks failed till November 2008 (Swagel, 2009). Therefore, a unexclusive confidence in bank syste m has gradually failed. A further interaction between international capital markets and financial institutions was full of complexities and the reasons for that should be found on political and economical levels. Political reasons for financial crisis are evident. These are political constraints. A complicated relationship between the congressional leadership and President Bush and his White House staff made 2007 an unconstructive year from the perspective of economic policy, although, ironically, it had the effect of making possible the rapid enactment of the early-2008 stimulus Democratic leaders by then appeared to be eager to demonstrate that they could govern effectively (Jackson, 2010). Administrations deliberations were not facilitated even in time of financial crisis worsening. On the governmental level financial crisis could be solved in basis of mortgage refinance programs and investments in banking and job-creating systems (Kawa, Vanbever, 2010). Therefore, the influenc e of a global financial crisis has greatly affected on money and capital markets. Deposit and non deposit victorious institutions have also been influenced greatly by financial crisis. State commercial banks have the main goal to increase profits and satisfy the needs of public by providing deposit options. Unfortunately, firms and individuals have decreased the level of deposits