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What was the cause of the financial crisis of 2007-2008
What was the cause of the financial crisis of 2007-2008
What was the cause of the financial crisis of 2007-2008
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The Structure of a Financial Crisis
INTRODUCTION
The year 2001 had been unlucky for Turkey. Apart from the crisis in 1994 and November 2000, the country had to face another financial crisis, causing problems in the management of its economy. Why does a country delve deep into financial crisis? What are the possible immediate triggers for both the current and potential new crises? What precautions should be taken for the key issues like the fragility of the financial and banking system, belated reforms and privatisation, rampant corruption, exchange rate policy? And how can the governments satisfy the markets and people to undertake these reforms?
The current crisis has not hit the country overnight. This article figures out the weakness of the system, years of neglect and mismanagement, possible solutions for other developing countries.
One has to bear in my mind that even evaluating the aftermath of the 1994 crisis, Turkey was a rising star, with aspirations towards full membership to the European Union. Among the potential applicants of EU membership, - mostly the Transition Economies of Eastern Europe- Turkey was the mere applicant with a functioning Customs Union with the EU back in 1995. With a relatively large and dynamic market, having high hopes for rapid economic and social progress, Turkey seemed a valuable candidate for the European Integration. Now after the 2000 November and 2001 February crises, the shrinking of the economy suggests that Turkey can only catch up with the figures of year 2000, as far as the year 2004, let alone the EU membership and further growth. To indicate why such a failure has been suffered, we have to go back to the roots of mismanagement. And that begins with the problems of Privatisation practices.
THE INITIATION OF PRIVATISATION
Privatisation has proved to be a successful method for improving institutions and maintaining corporate efficiency all around the world. But under certain conditions either privatised firms can get into serious difficulties or delaying the privatisation programs could trigger economic crises, together with the impact caused by years of mismanagement, not undertaking the progressive reforms and corruption - as experienced in some of the transition economies of Eastern Europe, Central Asia, Far East, and as is the case in this article, in Turkey
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The financial crisis of 2007–2008 is considered by many economists the worst financial crisis since the Great Depression of the 1930s. This crisis resulted in the threat of total collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. The crisis led to a series of events including: the 2008–2012 global recessions and the European sovereign-debt crisis. The reasons of this financial crisis are argued by economists. The performance of the Federal Reserve becomes a focal point in this argument.
The purpose of this paper is to look for the relations between Turkey and America from the cold war to current issues I will study on the situations that are developed between America and Turkey starts from the end of the cold war such as “Truman doctrine”, “missile crisis” and “gulf war”.
Overall, the expansionary monetary policy in Turkey may bring both advantages and disadvantages. It’s believed that this is the most effective policy for Turkey since it can be enacted more quickly by the central bank and the policy decisions are made purely based on the facts of the
Turkish-Syrian relations have almost always been soured and hostile in some fashion, dating back as early as the 1500’s. With a perpetual tit-for-tat policy and retaliation method that has been in effect between the two nations, it wasn’t until around 2003 or so in which Turkish relations to Syria had turned mostly friendly in response to the United States’ invasion of Iraq and Assad growing concerned over Syria being invaded as well. To gain more allies and help deter against this, Assad looked to Turkey for support, who was not only happy to better their ties with Syria, but was also in strong disagreement with the United States’ decision to invade Iraq as well. That is until the last five years in which the acting government in Syria has become increasingly more violent and hostile to it’s own people; essentially forcing the Turkish government to reject the growing friendly ties in the name of democracy. The geographic placement of Turkey in relation to the Middle-East and Europe, and particularly Syria, puts the country as a whole in a precarious situation from multiple powerful influences, such as NATO, the EU as well as the UN, and on the inverse, major Islamic figures and traditions held in the region. Because of this, Turkish history has been shaped and formed from the two major influences pulling on the country in very contrasting ways: The west, and the benefits of modernity and non-secularism in the state, and the East, and the fundamental religious beliefs of many who reside there who do not wish to break tradition or stray from their fundamental beliefs. Today is no different, although Turkey is increasingly leaning to the western state of mind and politics as a result of the shaky rela...
The U.S. financial crisis of 2007–2008 is considered one of the worst financial crises since the Great Depression of the 1930s. It almost made large financial institutions collapse and stock markets declined in a dramatic way around the world. The consumer wealth declined in trillions of U.S. dollars and played a significant part in the failure of key businesses and declines in economic activities. All these factors led to the 2007–2008 global recession and played a major role in contributing to the European sovereign-debt crisis.
The country of Turkey, as we know it, has only come about in the last 80 years or so. Before this time, the land of present day Turkey was referred to as Anatolia. Anatolia is considered the bridge that connects the Middle East to Europe. Despite years of occupation by differing nations, the area of present day Turkey has held some consistency and continuity. This continuity is possible because even though many count...
A report compiled by the U.S Financial Crises Inquiry Commission shows that the infamous global crises could have been avoided. It pointed out that failure in different financial institutions including the Federal Reserve accelerated the crises. Lehman brothers; one of the three largest investments banks in the United States has been cited in the financial crises in 2007. The bank went bankrupt and it had to be sold in September 2008 (Currie, 2010). The other two banks Morgan Stanley and Goldman Sachs had to become commercial banks where more regulation was done. The collapse of large and significant financial institutions like the Lehman Brothers propagated the economic crises. Investors withdrew over $150 billion from the money funds in the USA in two days after the collapse of the Lehman Brothers. This caused the money markets to get unstable thereby nee...
This paper provides an overview of the crisis, outlines the major causes of the crisis, examine alternative solutions to the problem
...olutionist reforms proved permanent, and gave Turkey domestic peace and a measure of prosperity even in his lifetime. But Kemalism has also left Turkey with a divided identity - Europeanised but not quite European, alienated from the Islamic world but still a Muslim country.
Cicek, Kemal. “The Cambridge History of Turkey. Volume 3: The Later Ottoman Empire, 1603-1839.” Journal of the Economic &Social History of the Orient 52, no.1 (2009): 153-158. EBSCO.
The Ottoman Empire had humble roots. Beginning as an Ottoman state, it progressively rose to power to become an empire. As a state, the Ottoman state started as a small state in current-day western Turkey. Based on Muslim beliefs and rule, the Ottoman State began to dissolve surrounding Muslim states, which were absorbed into the future empire. This move thereby ended all the other Turkish dynasties. The Ottoman Empire was marked as one of the largest, longest lasting empires. The Ottoman Empire lasted from the late 13th century to 1923. Throughout it’s time, the Ottoman Empire was remarked as highly successful and progressive. But like all empires, the Ottoman Empire had to make its end. The Ottoman Empire, like all dynasties, went through its rise, peak, and falling periods. This essay assesses each period in the Ottoman Empire's history.
Smaghi, L. (2009, Aprl 28). Conventional And Unconventional Monetary Policy. Speech at the International Centre for Monetary and Banking Studies (ICMB), Geneva. Retrieved from http://www.bis.org/review/r090429e.pdf
Turkey’s economy has weathered some spectacular pratfalls in the past, with a major economic crisis in 2001 almost bringing the country to its knees. What’s different in 2004 from the previous "recoveries" is how committed Turkey is to establishing firm economic footing once and for all. The government is swallowing the International Monetary Fund’s painful economic medicine, making tough choices for fiscal discipline.
Turkey is a country with a vibrant and colorful culture located between Europe and Asia. It has a booming economy of tobacco, cotton, hazelnuts, olives, and livestock. On October 23, 1923, the European land of Thrace and the Asian portion of the land of Anatolia known as the Ottoman Empire became to be the country of Turkey. The Country’s capital changed from Istanbul to Ankara in 1922 after the fall of the Ottoman Empire. The population of Turkey is around 72,907,000 people, mostly made up of Turks and Kurds. For the most part, Turkey’s culture has become very modern and up to date with most technology, internet, mobile data service providers, import and export, entertainment, and access to information. In short, the country’s past has been monumental in both the political, geographical, and biblical standpoint.
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