The ripple effect of the financial downturn spread across nations from 2007. The intensity of financial shock from US Subprime Mortgage Crisis was so large that it caused Europe to witness a falling economy. Through out 2009 till 2013 Eurozone has been facing a fluctuating economy causing serious concerns over rising unemployment and failure to revive the sleeping economy. In 2013, Asia Pacific faces serioius concerns with China, Japan & India falling slowly in the financial trap.The falling rupee, tumbling asian stock markets and a high food inflation are causing grave concerns over asian economies.

1. 10%
80%
The ripple effect of the financial downturn spread across nations from 2007. The intensity of
financial shock from US Subprime Mortgage Crisis was so large that it caused Europe to
witness a falling economy. Through out 2009 till 2013 Eurozone has been facing a fluctuating
economy causing serious concerns over rising unemployment and failure to revive the
sleeping economy. In 2013, Asia Pacific faces serioius concerns with China, Japan & India
falling slowly in the financial trap.The falling rupee, tumbling asian stock markets and a high
food inflation are causing grave concerns over asian economies.
UK & Eurozone 2009
USA 2007
Asia Pacific 2012
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FINANCIAL CRISIS – The Financial Ripple

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9th August 2007
BNP Paribas freezes three of their funds, indicating that they have packages of sub-
prime loans
14th September 2007
Northern Rock faces liquidity crisis and was the first run on a British bank in 150 years.
24th Jan 2008
Largest single year drop in US home sales
14th March 2008
Bear Stearns is bought by JP Morgan and was the „Crisis Trigger‟
The Beginning of the Crisis- USA (2007-2008)

3. The Global Meltdown continues…….
7th September 2008
US government bailed out Fannie Mae and Freddie
Mac, that had guarantee thousand of Subprime
mortgages
15th September, 2008
Lehman Brothers file for bankruptcy prompting first
worldwide panic
17th September,2008
HBOS, UK‟s largest lenders are rescued by Lloyds
TSB after a huge drop in share price
21st September 2008
Goldman Sachs and JP Morgan Chase mark an end
to investment banking model and change their status
to banking holding companies
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4. A TALE OF TWO BIG COLLAPSES
30th September 2008
Irish government promises to underwrite entire
Irish banking system.
7-8th October,2008
Iceland‟s biggest banks- Glitnir, Kaupthing and
Landsbanki collapse
8th October,2008
Eight central banks including the Bank of England, the European Central Bank, and the
Federal Reserve cut their interest rates by 0.5% in a coordinated attempt to ease the
pressure on borrowers
13th October, 2008
British government bails out several banks including Royal Bank of Scotland, Lloyds TSB,
HBOS.
14th November,2008
G20 meets for the first time since Lehman‟s went under that was compared in significance to
the Brettons Woods summit in 1944
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5. © 2013 Deena Zaidi. All Rights Reserved.
2 April
2009
• The G20 agrees on a global stimulus package worth $5tn
10
October
2009
• George Papandreou's socialist government is elected in Greece. Just over a
week later, he reveals that the hole in Greece's finances are double what was
previously feared
27 April
2010
• Greek debt is downgraded to junk
2nd
May,2010
• In a move that signals the start of the Eurozone crisis, Greece is bailed out for
the first time, after Eurozone finance ministers agree loans worth €110bn. This
intensifies the austerity programme in the country, and sends hundreds of
thousands of protesters to the streets
19th July
2010
• Ireland debt downgraded by Moody‟s
28th
November
2010
• European ministers agree a bailout for Ireland worth €85bn
Bailouts & Downgrading

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5 May 2011
The ECB bails out
Portugal
21 July 2011
Having failed to get its house
in order, Greece is bailed out
for a second time
5 August 2011
S&P downgrades US
sovereign debt
13th January 2012
S &P downgrades France and
eight other Eurozone countries
16th January 2012
EU bailout fund, The European
Financial Stability Facility, also
downgraded
12 February 2012
Greece passes its most
severe austerity package
yet
22nd February,2012
Eurozone Service Sector
shrinks raising fears of
recession in Eurozone
12 March 2012
The number of
unemployed
Europeans reaches its
highest ever level

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 Italian Borrowing
costs increase
 Euro-zone faces
double- dip recession
 Spain’s fourth largest
bank ,Bankia, says it
has asked for a
government bailout
 Spanish house prices
drop.
 France refuses to back
Greece’s call for more
time to enact reforms
 Spain’s most populous region
becomes latest to request for
financial help from Madrid
 Eurozone demands six day
week for Greece
 Germany's highest court
approves creation of euro
rescue fund
 EU under pressure to relax
terms on Greece's €130bn
bailout as critics warn of
1930s-style Great Depression
 Britain emerges from
the double dip
recession
 Eurozone
unemployment hits a
new high
 Cyprus becomes the
fourth EU country to
ask for bailout
 More austerity after
Ireland budget
Eurozone: FINANCIAL CRISIS – ECONOMIC
MELTDOWN - 2012

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9. © 2013 Deena Zaidi. All Rights Reserved.

10. 10%
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.
Arrival of the FINANCIAL CRISIS In Asia – 2013
Asia: Gold slumps to a two-year low as China GDP falls to 7.7%
UK : UK credit rating downgraded
US: US jobless rate falls to four-year low as EC cuts euro-zone growth forecast.
Eurozone:
 German parliament approves Cyprus bailout as Germany‟s private sector
shrinks
 Osborne calls on central banks to drive recovery at G7,
 Bailout payments for Cyprus and Greece
 France sinks back into recession

11. 10%
.
Disclosure of Banking Scandals amidst the financial
Crisis– 2013
 Abenomics: PM Shinzo Abe's stimulus package proposes to end the two
decades of stagnant growth in Japan. Japan's strong growth figures show
Europe the way
 IMF urges Greece to keep reforming, as EC risks trade war with China
 Eurozone crisis: IMF admits mistakes over Greece bailout
 RBS boss in shock resignation
 Former UBS and Citigroup trader charged over Libor-rigging scandal
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12. FINANCIAL CRISIS – ECONOMIC MELTDOWN-2013
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In 2013, Asia started witnessing serious effects of the crisis felt all across
Eurozone, UK & US. The repercussions faced in Asian markets are strong and
evident enough to say that the region is heading for a meltdown and measures
need to be taken. Below are some important events that took place and showed
that Asia faces challenging and tough financial times:
1. Asia contemplates a sharp depreciation of their currencies, following the sudden
outrush of foreign investors, triggered by the US Fed‟s signalling last week of a tighter
monetary
2. Basel III package for bank regulation to reform the capital, leverage and liquidity
regulations on banks reflecting the lessons of the crisis
3. The Indian rupee fell for a second session on July,2,2013, as state-run banks bought
dollars to meet the government's defense needs and on continued worries that foreign
investors would continue to exit domestic markets.

13. Too Big to Fail
The crisis proved that there is never any bank that is too
big to fail since some of the largest banks failed or were
bailed out. Too Big to fail‟ is a clear concept asserting that
certain financial concerns are too large and well connected
to fall apart and incases when this occurs the government
should step in to bail them out.
Shadow Banking
Can destabilize the financial system reinforcing the need to more effectively regulate it.
Many “shadow bank”-like institutions and vehicles have emerged in American and
European markets, between the years 2000 and 2008, and have come to play an
important role in providing credit across the global financial system. Shadow banks can
also cause a buildup of systemic risk indirectly because they are interrelated with the
traditional banking system via credit intermediation chains, meaning that problems in this
unregulated system can easily spread to the traditional banking system.
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Cross Border Banking
The huge & complex structures made it difficult to determine
the risk lay and how it would transmitted. Cross border
banking transmitted the crisis ferociously across national
jurisdictions, from the sub-prime US markets to financial
markets around the world. Foreign banks were operating as
branches rather than locally incorporated subsidiaries
highlighting the importance of countries making an explicit
determination of the mode of presence of foreign banks in
the form of branch or subsidiary.
OTC derivatives market
OTC derivatives market outpaced the regulatory regimes.
Excessive bilateral exposures with insufficient
collateralization + the inability of the market participants to
price and value the derivatives + insufficient risk assessment,
complexity and opacity of the products traded = to brew the
crisis to explosive proportions because of the
interconnectedness of the OTC derivatives market
participants.

15. 10%
FINANCIAL CRISIS – An Opinion
Global Economics Crisis arises due to many reasons , one of the biggest being lack of
banking ethics. Massive leverage, poor risk controls , rise of shadow banking and
global connection to risky banks and products led to a further breakdown. Initial
stages of the collapse reflect a certain disregard of banking ethics but after the
financial epidemic, it seemed there was a complete and total collapse of ethical
behavior amongst leading banks. A total lapse in the financial system is due to lack of
responsibility amongst banks especially towards its customers. The crisis proved to
show a lack of fiduciary responsibility towards the ultimate clients.
The subprime mortgage crisis was an unethical scandal that turned into an
unfathomable crisis. When it got global, countries took actions that either were to save
their member countries or keep investors‟ confidence intact in their concerned market.
One of the largest and by far the longest crisis still continues but what is still being
missed is the „ethical‟ part which needs to be across the board from the banks‟
executives to its employees. This behavior needs to be both exemplified and enforced
by top executives in the financial industry, placing client interests far above the
compensation interests of its own executives. A close watch and timely action is
required in order to avoid further breakdown. Conflict of interests need to be avoided
especially if the crisis is globally connected. People involved in banking scandals need
to be faced with rigor punishment since market sentiments are hurt in such cases and
leads to a turmoil which further ruins matters.
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