GLOBAL, ECONOMIC AND FINANCIAL CRISIS OF 2007-2008

1. GLOBAL ECONOMIC CRISIS
PRESENTED BY-
UMANG MAHESHWARI

2. INTRODUCTION
Global economic crisis may refer to:
• Economic events of the late 2000s:
• Financial crisis of 2007–2008
• Great Recession
• A global recession
• On February 7, 2007 one of the World’s leading bank, HSBC,
announced losses related to US, sub prime mortgage loans.
• In 2008, the most serious crisis to hit the global economy since the
Great Depression began in the US and spread rapidly to Europe.

3. CONT.…
• Many economies are still experiencing negative or declining growth rates
and economic restructuring, and current global unemployment is
estimated to exceed 200 million and continues to rise.
• The financial crisis of 2007–2008, also known as the global financial
crisis and the 2008 financial crisis, is considered by many economists to
have been the most serious financial crisis since the Great Depression of
the 1930s.

4. CAUSES OF ECONOMIC CRISIS
• Boom and Bust in housing market of US
• High risk loan and lending practices
• Economy wide recession in the US
• Recession in most advanced economies
• Securitization
• Great Recession of 2008-09 bottomed out in late 2009
• Government policies
• Central bank policies

5. CAUSES OF THE GREAT RECESSION
• Years of low interest rates
• Lax supervision and regulation of the financial system –
regulatory failure
• Excessive risk taking and leverage of the banks – especially sub
prime lending
• Global current account imbalances and global savings glut
• Irrational exuberance and animal spirits leading to financial
bubbles
• Distorted incentives of credit rating agencies

7. IMPACT ON THE WORLD
• International Trade
• Decline in growth
• Collapse in US’s financial sector
• Loss of confidence in global economy
• GDP of Other Economies
• Slow down in Latin America and Caribbean
• Unemployment

8. IMPACT ON INDIA
• Impact on Share market
• Impact on India’s Trade
• IT & BPO Sector
• FII & FDI
• Exchange rate depreciation
• Increase in Unemployment
• Impact of recession on India’s GDP Growth rate
• Investment