Worldwide Financial Crisis Research Articles

The Culprits That Affect the Unemployment Rate --------Empirical Analysis Based on U.S. Real Data

The worldwide financial crisis in 2008 and the corona-virus pandemic in 2019 both have caused severe damages to the U.S. economy and increased unemployment. This paper is helpful in analyzing the factors that contribute the most to the U.S. rate of unemployment. The paper begins with an overall summary of the rate of unemployment throughout the U.S. history from the year 2000 to 2023. Next, this paper utilized the multivariate regression model to study the effects of multiple factors on the U.S. rate of unemployment within the time period of 2000 to 2023 and thereby determine the most influential one. The rest of this paper performs further analysis on the possible influencing factors. Arguments and evidence are gathered from articles and documents. The conclusion is that the oil price, the college enrollment, the minimum wage, and the gross domestic product are all contributing in affecting the unemployment in the United States. However, the gross domestic product seems to be the most influential factor to the unemployment when compare to the other three factors. The monetary policy can shift the racial unemployment in U.S. Also, a surge in the rate of unemployment can be considered the symbol of the depression of the housing market.

Mitigating the impacts of COVID-19: failure mode and effect analysis and supply chain resilience (FMEA-SCR) combined model

PurposeThe coronavirus disease (COVID-19) pandemic generated a worldwide financial crisis by impacting several links of the supply chain, however companies can take advantage by quantitatively measuring the disruptive impacts.Design/methodology/approachThis study sought to develop the failure mode and effect analysis and supply chain resilience (FMEA-SCR), a hybrid tool developed using a potential failure mode and effect analysis (FMEA) applied to supply chain resilience (SCR) and taking into account the capability factors and business processes.FindingsIn order to validate, the proposed model was applied into two different organizational study cases: an university and a cooperative managing urban solid wastes with recyclable potential (MSWRP). Through the procedures described here any organization can understand and assess in a simplified way the impacts over their supply chain generated by such a crisis.Originality/valueThis study synthesizes three different procedures into a single method called FMEA-SCR, allowing organizations to understand and assess in a simplified way, the impacts over their supply chain generated by COVID-19. To this end, it brought together the studies developed by Rajesh and Ravi (2015) and Curkovic et al. (2015), on possible causes of disruptions in SC, the capability factors of Pettit et al. (2010) used by organizations to mitigate the effects of disruptions, besides Lambert's and Croxton (2005) business processes, thus weaving a method that allows organizations to visualize, analyze and classify the pandemic impacts over their supply chain.

An Evaluation of the Banking System to End the Country's Financial Crisis

The current worldwide financial crisis is the result of a confluence of elements that have existed in previous financial crises as well as some fresh elements. Several flaws in financial architecture and regulation have come to light as a result of the crisis, particularly in how systemically important financial institutions are handled. Financial institutions, systemic risk and vulnerability assessments, and financial institution resolution. The fact that the financial crisis is a global phenomenon has demonstrated that, while financial integration markets provide many advantages, they can also carry a high risk of serious economic consequences. To ensure the stability of a world that is becoming more and more financially interconnected, significant modifications to the international financial architecture are obviously required

Do the macro and global economic factors drive the nonperforming loans in GCC economies?

Purpose The current study aims to investigate the determinants of nonperforming loans (NPLs) in the GCC economies during the period spanning 2000 to 2018. It also examines whether the worldwide financial crisis of 2007–2008, which brought the issue of non–performing loans to the greater attention of academics and policymakers, had a substantial impact on NPLs in this region. Design/methodology/approach The sample consists of 53 conventional banks from GCC countries, and the basic data for the study is obtained from various sources such as Bankscope, IMF World Economic Outlook, World Bank and Chicago Board of Options Exchange Market Volatility Index. The estimations were done by dynamic panel data regression modeling using system generalized methods of moments. Findings The findings reveal that both, the non-oil real GDP growth rate and inflation have favorable effects on NPLs. On the other hand, domestic credit to the private sector and the volatility index have an adverse effect on NPLs. Furthermore, the period-wise analysis shows that the relevance and significance of the determinants of NPLs vary between the precrisis and postcrisis periods. It is also reflected through the intercept dummy, which is found to be significant, indicating that the financial crisis, as a global economic factor, had a significant impact on NPLs. A number of robustness tests are applied, which indicate that the results are mostly robust and consistent in terms of the significance of the explanatory variables and the direction of their relationship with the dependent variable. Practical implications Policymakers and bank authorities must strive to maintain a healthy economy and implement macroprudential policies to improve the financial stability of banks and reduce credit risk. Originality/value To the best of the authors’ knowledge, this is likely the first study that empirically investigates the influence of the financial crisis on NPLs in the context of GCC economies. In addition, the research spans 19 years to produce more conclusive results.

A Method for Classifying Residential Prices in Apartment Complex Using Computer Simulation Analysis: A Case Study

The price fluctuation of the real estate market has become an important factor affecting the stability of the national macro-economy. In the history of the worldwide financial crisis, there have been many times related to the real estate market. China's real estate industry occupies a pivotal position in the national economy, and entered a rapid development period in 2000, gradually becoming a pillar industry of the national economy. It ushered in the process of rapid expansion, with investment scale, construction scale, transaction scale and transaction price rising. From the perspective of noise and landscape, this paper discusses the possibility of applying landscape analysis to the price and pricing of apartment complexes. The noise, landscape and sunlight are analyzed based on the landscape analysis (including the point and line through the view analysis, and the line of sight analysis) to provide a basis for the unit price classification of the area.

Human Capital and How It Affects the Performance of an Organization

Many countries' economies collapsed in early 2020 due to the worldwide financial crisis and the Covid 19 pandemic. The economic stability of several nations has been disrupted by the outbreak. In this article, we will examine the many ways in which human capital contributes to a company's success. The administration is making significant efforts to boost economic growth in a more positive direction. The Human Development Index in Indonesia appears to have increased by 3.3% between 2015 and 2019, according to data from UNDP 2020. According to the Human Development Index (HDI), Indonesia would be ranked 107 out of 189 countries in 2020. The Indonesian government has taken many different ways and made many different kinds of attempts to help its people grow and develop their skills so that they can keep competing with other nations. The companies discussed here also played a role in spurring this expansion. Organizations in the business world also want to survive, thrive, and remain competitive on a global scale. Businesses have a responsibility and a potential remedy to their lack of global competitiveness: they can stimulate the growth of their resources. The best way for businesses to improve their performance is to invest wisely and train their employees further. The success of businesses can be directly attributed to their investment in human capital. Human capital models that explain why it matters for businesses to invest in their people have been backed up by this research. Keywords: Human Development Index, A Sustainable and Globally Competitive Economy

Credit allocation and the financial crisis: evidence from Spanish companies

The worldwide financial crisis of 2007–2008 raised serious concerns about the soundness of banks’ activities and about the extent to which banking regulation should supervise banks’ investment decisions. We contribute to this topic by examining the Spanish case, which has been emblematic of the bubble and burst dynamics in the credit market. In particular, we study the allocation of bank credit among Spanish companies from 1999 to 2014, showing that larger companies accumulated greater amounts of bank loans per unit of total assets, thus leading to a notable concentration. We also find that, during the Spanish boom period, bank loans shifted from the manufacturing to the construction industry, and in particular to the largest companies of the latter sector. This happened in spite of the high leverage of large construction firms, which was increasing also due to their growing debt. We argue that the higher operating benefits, reflecting the increase of the housing price during the boom period, overvalued construction firms as potential borrowers. The bankruptcy of several large construction companies during the Spanish crisis supports the need for monitoring and regulation, to avoid an excessive concentration of bank credit to a few large companies, especially if they belong to a specific sector.

ANALYZING INDIAS BALANCE OF PAYMENTS POSITION DURING THE PANDEMIC PERIOD

The current pandemic scenario is trying with the administration limits and wellbeing health frameworks across countries, and handles its socio-economic consequences. According to different reports, the health emergency which initially began as a wellbeing crisis has converted a worldwide financial turmoil on scales like the incredible downturn of 2007-08. According to the World Economic Outlook, the projection of worldwide development in 2020 will tumble to - 3 percent which is essentially lower than the development paces of - 0.1 percent during the 2009 financial turmoil. This has the monetary effect of Covid-19 far more highly contrasted with the 2009 worldwide financial crisis, making it the most exceedingly terrible downturn since the Great Depression of 1930s. An earnest attempt has been made in this paper to articulate the Indias Balance of payment position during the pandemic period. To conclude, No doubt the Indias balance of payment is surplus after a long gap of 18 years.

A Comparison between the Islamic and Western Corporate Governance Model with Special Emphasis on Pakistan

The convergence of western business methods with Islamic law in Pakistan's corporate governance is the topic of this article, which investigates the role that Islamic law plays in the country. Given the current state of the world's financial markets, it is more important than ever to have in place an efficient corporate governance structure. This event made it feasible for there to be an alternative to the financial system that is currently in place in Pakistan. As a result of the worldwide financial crisis, Islamic financing has emerged as a respectable alternative. As a consequence of this, the conventional monetary system will be contrasted with the Islamic monetary system during the course of this essay. In addition to this, it assesses the likelihood of corporate governance mechanisms converging in Pakistan, an aspect that is essential for the efficient administration of any financial system. In Pakistan, the Islamic Financial System (IFS) might be used as a replacement for the country's current financial system and as a mechanism for corporate governance, both of which might share characteristics with western models of corporate governance. On the other hand, using Islamic ideas as a litmus test might not be as problematic as it first appears to be.

Towards a More Stable Banking Financial Position COVID-19 Impacts and IFRS 9 Post-Model Practices “Management Overlays”

In the repercussions of the latest worldwide financial crisis that have occurred due to the corona virus reasons (COVID-19); unprecedented stressful economic conditions prevailed, coupled with significant recessionary waves reasoned of the worldwide imposed strict lock downs that have adversely affected most of the economic sectors across the globe. Based on such adverse conditions, and as banks were used to calculate their Expected Credit Losses (ECLs) within the provisioning systems (IFRS 9); the forward looking projections embedded at the banks models fell short to predict the COVID-19 hit, as well as objectively reflect the widely spread governmental rescue plans, such as payment holidays and moratoria schemes. Consequently, and based on such unprecedented challenges, new risk management practices—Management Overlays—have risen to help in terms of overcoming such a systemic uncertainty situation that added more hurdles with regard to banks models and forecasting powers. The researcher is discussing how banks can start using the management overlays, or post-model adjustments, according to each and every bank’s portfolio composition, trends, and stress testing outcomes, where risks and uncertainties cannot be adequately reflected in existing models, until the global regulators (e.g., central banks, and external auditing bodies), as well as the main research and rating agencies can reach and agree on the new set of the updated macroeconomic indicators that can be utilized globally, and per region, reflecting the new era post COVID-19, and supporting in building the new robust IFRS 9 models across the world effectively. Therefore, management overlays can play such a vital role in terms of fortifying the stability of the banking system through: ascertaining the adequacy of the banking provisioning systems, and guaranteeing the sufficiency of holding appropriate capital levels for confronting such an adverse and unprecedented situation of the COVID-19 pandemic, as well as similar situations in the future.

Emerging Trends of Central Government Deficit Indicators in India

After the implementation of Fiscal Responsibility and Budget Management (FRBM) Act in India, a debate has been started among the economists as to the relevance of the deficit cutting strategy. The objective of the study is to analyses the emerging trends of central government’s major deficit indicators viz., fiscal deficit, revenue deficit and primary deficit in Indian economy from 1980-81 to 2015-16. The study period has been divided into three sub-periods i.e. pre-liberalisation period (from 1980-81 to 1990-91), post liberalisation period till FRBM Act (from 1990-91 to 2002-03) and the post Fiscal Responsibility and Budget Management (FRBM) Act (from 2003-04 to 2015-16) in reply to the worldwide financial crisis and succeeding return to a fiscal consolidation path. The exponential model has been fitted to the time series data for estimating compound annual growth rate (CAGR) of fiscal indicators. The compound annual growth rate has been estimated for The finding point out that the crisis led to the burgeoning of the government deficit to unsustainable levels and encouraged the government to initiate and adopt economic reforms during the study period 1980-81 to 2002-03 and also ensure that the deficit stood at more reasonable levels. On the other hand, the central government has been more proactive and has undertaken fiscal policy reforms to ensure a steady reduction in deficit indicators of central government leading to a more resilient economy after the implementation of FBRM. The study suggested that for fiscal reforms to succeed, continued high economic growth is a prerequisite which in turn requires strong social and economic infrastructure.

SARS-CoV-2 infection serology: a useful tool to overcome lockdown?

The outbreak of 2019 novel coronavirus disease (Covid-19) caused by SARS-CoV-2 has spread rapidly, inducing a progressive growth in infected patients number. Social isolation (lockdown) has been assessed to prevent and control virus diffusion, leading to a worldwide financial and political crisis. Currently, SARS-CoV-2 RNA detection in nasopharyngeal swab takes place by real-time PCR (RT-qPCR). However, molecular tests can give some false-negative results. In this context, serological assays can be useful to detect IgG/IgM antibodies, to assess the degree of immunization, to trace the contacts, and to support the decision to re-admit people at work. A lot of serological diagnostic kits have been proposed on the market but validation studies have not been published for many of them. The aim of our work was to compare and to evaluate different assays analytical performances (two different immunochromatographic cards, an immunofluorescence chromatographic card, and a chemiluminescence-automated immunoassay) on 43 positive samples with RT-qPCR-confirmed SARS-CoV-2 infection and 40 negative control subjects. Our data display excellent IgG/IgM specificities for all the immunocromatographic card tests (100% IgG and 100% IgM) and for the chemiluminescence-automated assay (100% IgG and 94% IgM); IgG/IgM sensitivities are moderately lower for all methods, probably due to the assay viral antigen’s nature and/or to the detection time of nasopharyngeal swab RT-qPCR, with respect to symptoms onset. Given that sensitivities (around 94% and 84% for IgG and IgM, respectively) implicate false-negative cases and given the lack of effective vaccines or treatments, the only currently available procedure to reduce SARS-CoV-2 transmission is to identify and isolate persons who are contagious. For this reason, we would like to submit a flowchart in which serological tests, integrated with nasopharyngeal swab RT-qPCR, are included to help social and work activities implementation after the pandemic acute phase and to overcome lockdown.

What Factors Influence European Corporate Bond Spread?

This paper examines the main determinants of corporate euro-bond spread. We analyse a large sample of corporate euro-country bonds over the period May 2005 -January 2012, considering three sub-periods: May 2005- July 2007 (pre-crisis period), August 2007-April 2010 (worldwide financial crisis) and May 2010-January 2012 (European sovereign debt crisis).
 
 We show that both liquidity risk and risk related to the country of the issuing firms affect corporate bond spread. We also find that the market yield of corporate bonds issued in the main European countries is, other things being equal, strongly influenced by the risk of the corresponding sovereign bonds and Credit Default Swap (CDS). Finally, we compare the yields of bonds issued by banks with those of bonds issued by firms from other sectors and find that the spread, other things being equal, is significantly higher for banks. These findings may have operating implications for market activity, regulators and policy makers.

Challenges to global financial stability: Interconnections, credit risk, business cycle and the role of market participants

The worldwide financial crisis (WFC) of 2007-09 has shown the importance of cross-sectional dependencies of assets, credit exposures and volatility, which can threaten domestic and global financial stability through cascades in financial networks. A correct assessment of company-specific risk has to account for the potential risk spillover effects from other firms (Hautsch et al. 2014). This is because of the intertwined nature of financial markets, which allow the spread of risk throughout the system (Acemoglu et al., 2015). The potential impact of interconnected financial institutions on the entire financial system has been a financial stability concern for central banks and regulators. The need for economic foundations for a systemic risk measure is more than an academic concern since it involves regulators, supervisory authorities and policy-makers (Acharya et al. 2017). This special issue provides a substantial contribution to the systemic risk literature

Does Global Financial Crisis Integrate the Regional Market in Asia More Strongly?

The aim of this paper is to analyze whether the worldwide financial crisis integrates the regional markets in Asia more strongly. Secondly, it is also to examine whether the integration of regional markets in Asia necessarily leads to a weak form of market efficiency. To examine this we have considered the different broad based and liquid stock indices such as the Sensex and BSE 100 from the Bombay Stock Exchange; the S&P CNX Nifty from the National Stock Exchange, representing India; the Hang Seng Index from the Hong Kong Stock Exchange, representing China; the Kuala Lumpur Composite Index (KLSE), Bursa Malaysia representing Malaysia; the Nikkei 225 from the Tokyo Stock Exchange representing Japan, and the Straits Times Index (STI) from the Singapore Exchange representing Singapore. The study considered the daily data spanning from 4th January 1994 to 2nd May 2012. The full sample period was split into three forms such as the whole sample, the Global financial crisis and the post global financial crisis. The short term interaction was studied by using Toda Yamamoto’s procedure of Granger’s Causality in VAR Block Exogenity form and the long run equilibrium relationship was tested by applying the Johansen Maximum Likelihood procedure. And so the paper explored the possible, integrating relationship at the volatility level among the regional stock indices by applying the ARCH school of models. Finally, the Random Walk Hypothesis was tested by employing the Chow-Denning (1993) and the Lo and Mackinlay (1988) multiple variance ratio test to examine the efficiency of the market. The major findings of the study indicated that the worldwide financial crisis integrates the regional markets in Asia more strongly in the short term from 2007 onwards. There is no long run equilibrium relationship among the regional stock markets. The study also found that the integration of the financial market does not necessarily contribute to market efficiency.

Capital Adequacy Norms: Banks Compliance with BASEL-III Norms

The worldwide financial crisis of 2008-2009 had unfavourably affected the banking sector and impelled the Basel Committee on Banking Supervision (BCBS) on amending its existing capital adequacy guidelines in December 2010, termed as Basel-III guidelines, to reduce the chances of happening of any such crisis in the future. In this paper, we empirically analyse whether after complying capital adequacy ratio as per RBI Basel-III norms, the banks are able to take gain investors' confidence into them. This paper analyses whether risk perception of CAR compliant banks has increased or decreased or stagnant in terms of change in advances and profitability for the fiscal years 2015 and 2016. The data being used for the analysis are financial reports (balance sheets and income statement) of the banks and their capital adequacy ratios for the fiscal year 2014-2015 and 2015-2016.

Thinking Ahead of the Next Big Crash: Clues From Athens in Classical Times

Credible analyses and evidence submitted by experts from universities, international organizations and independent think tanks show that the trends which led to the 2008 worldwide financial crisis remain intact. As a result, central for responsible leaderships should be the concern how to forestall the next big one which might prove uncontrollable. Given the world dominance of the U.S. dollar, in a 2015 paper I discussed two paths of possible reforms: One bold but gradual, which would entail altering the present institutional setup of the U.S. Federal Open Market Committee (“the Fed”), provided that it maintains control over the Federal Funds Rate (FFR); and, if not, a radical one, which would entail replacing the Fed with a monetary regime based on free banking. In this paper I go a step further in the latter direction by drawing on the model of free banking that emerged in Athens in classical times and enabled the Athenian “empire” to turn the Attic drachma into the dollar of today, throughout the eastern Mediterranean and beyond, without causing major financial crises for over two centuries. More specifically, I argue that, even if the said model had not proved its potential as a highly successful historical precedent, as banker of the world, the U.S. ought to consider it as a benchmark for reference and adaptation, before an unexpected international financial crisis and/or the revolutionary technological developments in the front of gold-like digital currencies, precipitate a monetary regime change.

The nexus between credit risk and liquidity risk and their impact on banks financial performance: Evidence from Pakistan

Risk management became an important dilemma in the banking literature and has gained consideration since the financial crisis of 2007-08 which brought numerous challenges for most organizations. More than 325 banks’ failure were reported in the United States during the worldwide financial crisis. The high number of banks failures needs to evaluate the risk management efficiency of banking institutions of Pakistan. In this study, we used the PVAR model and Simultaneous equation approach to examine the link between Liquidity Risk and Credit Risk and its influence on banks’ performance working in Pakistan. The panel data was collected from 33 banking institutions between the period 2008 - 2018. The results revealed that Credit Risk and Liquidity Risk are not interrelated with each other. However, the two risks independently influence the banks’ performance and their relative interaction plays a major role in the instability of the banking sector. The finding forms the foundation for recent regulatory exertions to better understand the two types of risks and to strengthen the joint management of both Liquidity Risk and Credit Risk.

Tougher than the rest? The resilience of specialized financial intermediation to macroeconomic shocks

This paper uses a unique and comprehensive dataset comprised of 41 years of detailed banking data from the German building society industry to provide empirical evidence of the resilience of specialized financial intermediation (SFI) to macroeconomic shocks. Compared to studies on the German banking industry, we show that SFI is extremely stable despite generally less diversified revenue streams. We are also able to illustrate the impact of various economic conditions and cycles on the interactions between the building society sector and macroeconomic development. We use a VAR approach to demonstrate that 1) macroeconomic and mortgage-specific market shocks have limited or no impact on the banking performance (return on equity) or distress (write-off) indicators, and 2) the results of previous studies showing that financial rewards lead to higher bank funding stability on a contractual level also hold when analyzing data on an institutional level. As much research has found, and as the recent worldwide financial crisis highlighted spectacularly, banking stability is fundamental to the overall stability of financial systems and economies as a whole. Therefore, our results contribute to the ongoing discussion of whether specialized financial intermediation can indeed lead to more stable banking systems.

O financiamento das pequenas empresas e o desequilibrio territorial rural-urbano: o caso da provincia da Coruña

Tras a crise financeira, a reordenación do mapa bancario e consecuente perda de entidades financeiras propias, cuestionámonos se a problemática de acceso a crédito bancario pode ser máis acusada para as PEMEs galegas en entornas rurais. O obxectivo da investigación é o estudo do crédito comercial como alternativa ao crédito bancario, o diagnóstico das dificultades de acceso a financiamento e a súa relación cos desequilibrios territoriais rural-urbano.Os resultados son aínda preliminares, pola necesidade de refinar os datos de acceso a financiamento das empresas e as escollas de tipo econométrico. Con todo, tomando unha mostra de empresas industriais da provincia da Coruña, compróbase que os volumes de crédito comercial son relativamente baixos no contexto europeo, e as empresas que operan no rural conceden menos crédito comercial que as urbanas. Ademais, fináncianse máis vía provedores – coherente coa hipótese de contar con peor acceso a crédito bancario – mais o efecto non é significativo para as empresas independentes.