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Business

BUSINESS AND SOCIETY

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BUSINESS AND SOCIETY

 

The reason for the occurrence of the 2008 financial crises was due to the rapid growth of unchecked derivatives at the time. From 2004 to 2006, the Federal Reserve began increasing the rates of the fed fund, and many individuals who had received money from the bank had interest-only loans. Demand for real estate decreased as interest rates continued to rise, and as prices of houses declined, people who had borrowed found it challenging to pay. Banks, on the other hand, had multiple derivatives that they found hard to sell as their worth was declining. Later, banks refused to give money to other banks since they were fearful of piling up other derivatives, which resulted in the 2008 financial crises.

The financial crises led to banks losing money on loans they had given out, lending out of cash between banks stopped, and banks refused to lend to other businesses. Banks and hedge funds are to be supervised to maintain the amount of leverage used by such financial institutions, and also, the government should intervene during such crises. An example is that the government should have bought loans to prevent the 2008 financial crises from happening. I agree that derivatives make the market safer since they are only used to reduce or increase the risk to provide maximum profits..

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To conserve the environment, I have changed my mode of travel and began cycling to work, which helps to preserve the ozone layer. It is a must for every member of the family to carry recyclable bags when shopping. Recyclable bags can be washed when dirty and used again, unlike plastic bags that pollute the environment and do not decay quickly. The benefits of such practices include being able to comply with the law, reduce waste, and the ability to reduce cost.

Works Cited

An Article in a Scholarly Journal

Coffee Jr, John C. “What went wrong? An initial inquiry into the causes of the 2008 financial crisis.” Journal of Corporate Law Studies 9.1 (2009): 1-22.

Blackman, Allen, and Jorge Rivera. “Producer‐level benefits of sustainability certification.” Conservation Biology 25.6 (2011): 1176-1185.

 

 

 

 

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