Arre dost is globaL CRISIS ki shuruwat kaise hui
lets see
While on the subject of global imbalance and global economic crisis it is worth recalling the prescient observations of former RBI Governor Y. Venugopala Reddy. In an address at the Financing for Development (FFD) Office, United Nations, on May 11, 2006, he had this to say:
“One wonders whether there is a dissonance between the perception of financial markets and that of policy makers in regard to global imbalances………..The policy makers appear to give some signals of concern, but the response of the financial markets is often out of alignment with the signals. Interestingly, anecdotal evidence shows that analysts in financial intermediaries are sensitive to the downside risk of imbalances but the conduct of the participants does not reflect the awareness.......... If such dissonance is true, and persists, what would be the effectiveness of public policy?”
The speech was delivered 29 months before the collapse of Lehman Brothers and other institutions and the full impact of the crisis began to be felt around.
The global financial crisis began to un-ravel following the emergence of the sub-prime mortgage crisis in the USA in 2007. This in turn was caused by the housing market down - turn fuelled by the availability of housing facilities more than what is necessary. As a result, many financial companies who were engaged in such type of business were closed down. Many of them were merged with larger companies.
In the subsequent chapters we would describe the basic concepts related to the crisis, analyse its un - folding in a step - by - step manner and bring out its reasons, impacts and the suggested remedies.
