(2011) stated that bank CEO incentives can't be answerable for the credit crisis, as their incentives appeared to be aligned with their interest of their shareholders. Find no evidence that they performed better (Fahlenbrach and Stulz 2011). Fahlenbrach & Stulz (2011) discover verification that banks with higher shareholder- management incentive alignment, options holdings or through stock executed worse during the financial crisis. They conclude, “This evidence recommends that CEOs took exposures that

1. Introduction The financial crisis started in the USA because of subprime mortgage crisis in 2007. As a consequence of it, a credit crunch was originated and it quickly spread from the real state sector to other sectors, and furthermore, from USA to other countries. This caused a series of financial and economic crises like the collapse of housing markets in Europe, the global stock markets, global financial systems and markets, along with a lot of large banks and financial institutions, as (Sun

1. Background The Financial crisis was triggered in 2006 when US housing market began to crumble as the housing price reached their highest point after years of speculative price increase; many house owners defaulted on their loans, particularly subprime mortgagers (Archarya et al., 2009). Starting in mid-2007, the outburst of US housing bubble in the subprime mortgage leads to the global financial crisis that has been often so called ‘Great Recession’ (Verick and Islam, 2010). Archarya et al

Marconi (2010) believes that the role played by the institutional investors propagated the financial crises. Institutional investors, which is both, individual or companies do enjoy the benefits of reduced commission preferential regulations. This is due to their large and professional investments. Institutional investors like the mutual funds, pension funds, hedge funds like Magnetar Capital, and Life insurance companies like the AIG and investments trusts contributed to the global financial crises

Financial crises are considered as an intricate phenomenon and the diverse number of reasons for why they transpire is verification to this intricacy. Since the middle of 2007, the global economy has had to overcome what is judged as the most lethal global financial crisis ever documented together with a recession, which had drawn comparisons to the Great Depression of 1929 ( Eichengreen and O’Rourke, 2009). As the crisis began inflating into many economies and countries, some of the leading and

Introduction Financial crisis has deep roots into the past. This has been aptly described in the book ‘Global Minotaur’ by Yanis Vakroufakis. According to Yanis (2011), the crisis started with a phase of food shortage and famines around 12,000 years ago. This was the foundation of ‘civilisation’, which led to industrialisation and global integration. He has described how the financial crisis in 2008 was similar to the 1929 Great Depression, where one of the causes of the crash was the development

and managers. Although there are some distinctions of their motivation to engage in earnings management, they determine the information disclosure together. The objective of earnings management is the accounting income disclosed in the external financial reporting. The method of earnings management is realizing the control and adjustment of accounting by using accounting and non-accounting measures that are allowed by GAAP standard. The purpose of earnings management is to maximize the self-interests

were rational. The 2007-2008 Global Financial Crisis (GFC) is posited to have originated from the notion that all available information was utilised, causing agents to fail to thoroughly investigate and confirm “the true values of publicly traded securities,” leading to a failure to register the presence of an asset price bubble preceding the GFC (Ball 2009). This essay will use the notions of EMH to determine the extent to which they can explain the Global Financial Crisis using the US as a case

The financial crisis of the first decade of the new millennium, normally referred to as the Global Financial Crisis, is considered by many economists as the worst financial crisis since the Great Depression of the 1930s. It resulted in the total collapse of large financial institutions as well as the bailout of banks by national governments and downturns in stock markets around the world. In many areas including our own Metropolitan area of Kansas City, Missouri, the housing market also suffered

Market Theory and Behavioural Finance. Efficient Market Theory suggests that in every financial market the flow of information is very efficient and this is reflected in the price of the share at which it is being traded. As we know that the price of the share floating in a market is not only dependent upon the company name printed and the information about the company in the balance sheet and other financial statements available to the public (Baghestani, H., 2009). In fact government and political