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The Credit Crisis Around The Globe

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Ocaya (2012) state that the credit crisis is a financial market or economic meltdown of borrowing the funds to the borrower and cannot get back, it evaluated by severe shortage of money or credit bring accumulation of bad debts, defaults and falling financial institutions among others. However, the experts and economists are unclear as what form a credit crisis. The Wall Street defines a credit crisis as a “period during which borrowed funds are difficult to get and, even if funds can find, interest rates are very high”.
Credit crisis mostly began in 2007. The effect of the credit crisis has brought fall down on the housing market in some country resulting in foreclosures and unemployment. In addition, the credit crisis had immediate effects on property markets but has spread into global trade and has affected the overall prediction global economic growth , forcing growth target of many countries changing down. While they are some countries had not severely affected by the credit crisis.
This critical discuss or analysis involves a title of bank CEO incentives were major causes in credit crisis that links to the journal of “Bank CEO incentives and the credit crisis”, written by Fahlenbrach and Stulz (2011) and other journal as well.
Fahlenbrach and Stulz (2011) stated that investigation of justification for the dramatic collapse of the equity capital of much of the banking industry in the U.S, one highlight argument is that bank executive has poor incentives during the credit crisis. They decide how close the relationship between interests of the bank CEO will aligned with those of their shareholders before the beginning of the crisis, whether this can describe banks performance in the intersect section during the credit c...

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