Question

Case Study Assignment: Submit a paper answering the following questions:

1. Each student will research 2 areas that they think were the primary contributors to the financial crisis for both the US and Iceland.

2. Students will use the library resources to find 2 newspaper or magazine articles about the impact of the banking/financial crisis for both the US and Iceland.   Please properly cite all resources.

Help!! Need some sources and an idea of how to do this essay

Answer 1

ANSWERS::

GIVEN THAT::

Answer 1).

1) COLLAPSE OF BANKING SECTOR IN ICELAND :-

a. The privatization of iceland's banking sector propelled by borrowed money e which accelerated the housing prices and soaring eventual soaring of consumption lead to growth of Iceland stock market by 900% between 2003 and 2004 point.

b. This attracted Global investors open high interest Online bank account with Iceland point in 2008 iceland's Bank collapsed wiping out 50,000 people saving plunging Iceland US into debt and putting 25% of home owners into mortgage default.

2) DEREGULATION IN THE FINANCIAL INDUSTRY IN UNITED STATES AND BURSTING OF THE HOUSING BUBBLE :-

a. Deregulation in the financial industry that permitted banks to engage in hedge fund trading with derivatives lead to increase in demand of more mortagages by the banks to support the profitable sale of these derivatives.

b. In 2004, the Federal Reserve raised the fed funds rate on these new Mortgages leading to a fall and Housing prices and and as a result the supply of houses outpaced the demand for housing .

c. This track the homeowners who couldn't afford the payment but couldn't sell the house and when the values of the derivatives crumbled bank stop lending to each other. This lead to the great recession of 2008.

Answer 2 :-

Impact of the financial crises of 2008 :-

a. The banking sector lost money on mortgage defaults.

b. InterBank lending was completely freezed.

c. The credit to consumers and businesses completely dried up.

d. With the US falling into recession ,the demand for imported goods plummeted which spurred the Global recession further.

e. The housing prices fell sharply.

f. The unemployment level Rose above 9%.

RESOURCES :-

1) bbc/How did Iceland clean up it's banks ?/10 February 2016.

2) News.bitcoin/Three Bank failures Open New Chapter in Never Ending Financial Crisis .