Financial crisis and its impact on the economy term of a massive fiscal policy contracts causing numerous disruptions within the financial sector (Allen, 2012). A financial crisis is characterized by a high level of bankruptcy within banking institutions and a significant decline in asset values. Usually, a crisis in the financial sector affects the economy globally, leading to substantial consequences on economic activities, resulting in a broad recession associated with low investment and employment rates (Cihak, 2013). Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay The classification of financial crisis can be classified into three broad categories, namely debt crisis, banking crisis and currency crisis (Salotti, 2015). . However, this categorization is not fundamentally exclusive since some financial crises are “twin crises”. A double financial crisis occurs when currency depreciation aggravates the problem of the banking sector due to the exposure of the financial institution to foreign currencies (Shleifer, 2010). Therefore, a crisis within the banking sector occurs when financial markets experience a considerable number of defaults, thus encountering difficulty in repaying contracts in real time (Reinhart, 2011). For example, the Great Depression of the 1930s had a significant impact on the reputation of the macroeconomic system. theory and, by extension, affecting financial markets and institutions (Garcia, 2013). As a result, the outbreak of the 2008 financial crisis not only changed individual financial institutions, but the crisis also spread to influence theories and long-standing norms, beliefs and principles in regulating financial systems. Therefore, the structural organization of the financial system has focused more on supervision and reform of macroprudential regulations (Piskorski, 2010). As a result, financial regulatory reforms have sparked a lively debate among various financial markets and institutions, academics and practitioners. Subsequently, the Basel Committee launched a consultative document to assess the importance of the role of markets and financial institutions (Kim, 2013). The committee focused on stabilizing financial systems, arguing that the cost of new financial regulatory reforms will be relatively cheaper compared to the relative benefits (Kim, 2013). However, contrary to the Basel Committee's arguments, the banking industry favored the position that new financial regulatory reforms would cripple economic growth due to high costs of financial intermediaries which would pass through to economic systems (Allen, 2012). Nevertheless, some scholars and practitioners argue that the financial principles and beliefs subscribed to by the Basel Committee are more likely to ensure a more resilient financial system (Cihak, 2013). It is therefore essential to assess a wide range of banking indicators such as the level of financing. strategy, regulation, economic model, market structure and stability in order to assess the causes of a crisis within the financial sector as evidenced by the period 2007-2009. Additionally, an assessment of stability, effectiveness, cost-effectiveness and qualityof the banking sector and a measure of financial globalization would be useful to explain and therefore evaluate the ex post impact of the financial crisis from 2007 to 2009. Determinants of financial crisesAccording to the study conducted by Allen on the financial crisis, the structure and reform, the global financial crisis of 2007–2008 was mainly due to various factors related to financial markets and institutions, such as financial innovations, restrictions and regulatory measures (Allen, 2012). Liberalization and deregulation of financial institutions played a greater role in creating a financial crisis due to the failure of regulators to control and exploit various risks and uncertainties within the sector. banking sector (Allen, 2012). For example, the multiple "shadow investment program" activities, conducted primarily by non-bank commercial organizations such as investment banks, were not subject to strict financial regulations as depository banks. Therefore, tax innovations and securitization have helped accelerate the asset boom, leading to an increase in debt levels. Financial regulatory reforms A study conducted by Kim on regulatory reforms within commercial institutions indicated that consumers tend to have a productive capacity for complex financial monitoring. products (Kim, 2013). Thus, prudent and tailored financial regulatory reforms are important with respect to maintaining and stabilizing financial markets and institutions (Kim, 2013). Nevertheless, some scholars and practitioners argue that strong economic regulation and supervision are essential to the general examination of the role of financial regulation, while others support lax supervision (Piskorski, 2010). As a result, some of the financial regulatory reforms have been implemented within the banking sector. However, they vary by country. Among the regulatory measures applied are the supervision of banks by the private sector and the regulation of capital regarding the minimum amount required (Salotti, 2015). In addition, key indices such as guidelines on asset and liability diversification procedures have been added to the regulatory measures. According to Garcia, the complexity of financial tools, particularly for risk transfer, has contributed to the vulnerability of banking institutions and their increased vulnerability to small securities. (Garcia, 2013). As a result, sound prudential restrictions on financial transactions become more crucial to ensure stability within the financial sector. Its findings indicate that a financial crisis could be contained by strict entry conditions. However, Reinhart argues that a banking system with firm entry conditions increases its strength capacity. Indeed, current entry conditions protect the banking sector by preventing it from taking excessive risks and thus facilitating a competitive banking environment (Reinhart, 2011). regulatory reforms within the banking sector in 143 countries (Salotti, 2015). The results showed that regulatory restrictions within the banking sector regarding insurance, the real estate market and securities mainly contributed to the financial crisis of 2007-2009. This is because there were no strict entry requirements. Generally, entry requirements indicate what one needs to obtain a banking license, unlike diversification which assesses the suitability and correct procedures and guidelines for carrying out asset diversificationand allow the bank to make loans to foreign countries. Typically, investment regulation measures the extent to which banking institutions adopt prudential limitations, particularly on required assets. On the other hand, private monitoring measured the extent to which financial regulatory reforms allow the private banking sector to closely monitor commercial institutions. This is why, according to research conducted by Shleifer, capital regulation can also lead to a financial crisis. Indeed, the strengthening of capital regulations destabilizes financial institutions. A study on banking instability, conducted by Shleifer, found that the measure of public financial institutions has a higher degree to which banking sector assets are held by the government. Therefore, state-owned financial institutions are more likely to experience a crisis. Indeed, some government officials may not have the adequate skills to manage the institution, which makes the banking institution less competitive. A less competitive banking sector is weak, making it difficult for the country to defend its local currency in the event of a crisis in the foreign exchange markets. Financial Innovation Among the many studies conducted on the causes of a crisis within the financial sector, only a few explore the effects of progress within the financial sector. This may be due to the vagueness of the definition of financial innovation or the lack of readily available information (Piskorski, 2010). Various studies on financial innovation mainly use the number of patents to measure the level of innovation. Therefore, the pragmatic approach adopted by this study effectively calculated the overall index as a proxy indicator that was used to assess the extent of progress made within the financial sector in each particular country. The study used available international data to create a unique picture to determine the impact of financial modernization with respect to the role played by financial markets in causing unrest within the banking sector in 2007-2009. Financial crisis in 2007-2009The global economic crisis of 2007-2009 led to a global collapse of the economy and, consequently, a loss of assurance of the financial system (Cihak, 2013). However, despite some positive and critical economic indicators, the global economy remains uncertain and fragile. The recent global financial crisis is expected to cause a drastic economic downfall that will spread from one country to another. For example, in the case of the sovereign debt crisis in Greece, several countries in Europe and beyond suffered serious and contagious effects due to the crisis. However, the severity and scale of the impact of the financial crisis varies from country to country. other. This therefore raises a fundamental research question of assessing and determining the key factors that affect the degree and frequency of occurrence of unrest within the financial sector and, by extension, the causes of a financial crisis within the banking sector in 2007-2009. Several studies by academics, practitioners, and financial markets and institutions have indicated that hyperactive advancements within the banking sector and deregulation of the business sector have been attributed to different types of crises, particularly in recent decades ( Allen, 2012). For example, the inability of financial regulatory and supervisory agencies to keep up with the rapid development of the financial sector, its products and its practices, has played an important role in the intensification of financial crises. In addition, the guidelines.

Essay / Financial crisis and its impact on the economy term of a massive fiscal policy contracts causing numerous disruptions within the financial sector (Allen, 2012). A financial crisis is characterized by a high level of bankruptcy within banking institutions and a significant decline in asset values. Usually, a crisis in the financial sector affects the economy globally, leading to substantial consequences on economic activities, resulting in a broad recession associated with low investment and employment rates (Cihak, 2013). Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay The classification of financial crisis can be classified into three broad categories, namely debt crisis, banking crisis and currency crisis (Salotti, 2015). . However, this categorization is not fundamentally exclusive since some financial crises are “twin crises”. A double financial crisis occurs when currency depreciation aggravates the problem of the banking sector due to the exposure of the financial institution to foreign currencies (Shleifer, 2010). Therefore, a crisis within the banking sector occurs when financial markets experience a considerable number of defaults, thus encountering difficulty in repaying contracts in real time (Reinhart, 2011). For example, the Great Depression of the 1930s had a significant impact on the reputation of the macroeconomic system. theory and, by extension, affecting financial markets and institutions (Garcia, 2013). As a result, the outbreak of the 2008 financial crisis not only changed individual financial institutions, but the crisis also spread to influence theories and long-standing norms, beliefs and principles in regulating financial systems. Therefore, the structural organization of the financial system has focused more on supervision and reform of macroprudential regulations (Piskorski, 2010). As a result, financial regulatory reforms have sparked a lively debate among various financial markets and institutions, academics and practitioners. Subsequently, the Basel Committee launched a consultative document to assess the importance of the role of markets and financial institutions (Kim, 2013). The committee focused on stabilizing financial systems, arguing that the cost of new financial regulatory reforms will be relatively cheaper compared to the relative benefits (Kim, 2013). However, contrary to the Basel Committee's arguments, the banking industry favored the position that new financial regulatory reforms would cripple economic growth due to high costs of financial intermediaries which would pass through to economic systems (Allen, 2012). Nevertheless, some scholars and practitioners argue that the financial principles and beliefs subscribed to by the Basel Committee are more likely to ensure a more resilient financial system (Cihak, 2013). It is therefore essential to assess a wide range of banking indicators such as the level of financing. strategy, regulation, economic model, market structure and stability in order to assess the causes of a crisis within the financial sector as evidenced by the period 2007-2009. Additionally, an assessment of stability, effectiveness, cost-effectiveness and qualityof the banking sector and a measure of financial globalization would be useful to explain and therefore evaluate the ex post impact of the financial crisis from 2007 to 2009. Determinants of financial crisesAccording to the study conducted by Allen on the financial crisis, the structure and reform, the global financial crisis of 2007–2008 was mainly due to various factors related to financial markets and institutions, such as financial innovations, restrictions and regulatory measures (Allen, 2012). Liberalization and deregulation of financial institutions played a greater role in creating a financial crisis due to the failure of regulators to control and exploit various risks and uncertainties within the sector. banking sector (Allen, 2012). For example, the multiple "shadow investment program" activities, conducted primarily by non-bank commercial organizations such as investment banks, were not subject to strict financial regulations as depository banks. Therefore, tax innovations and securitization have helped accelerate the asset boom, leading to an increase in debt levels. Financial regulatory reforms A study conducted by Kim on regulatory reforms within commercial institutions indicated that consumers tend to have a productive capacity for complex financial monitoring. products (Kim, 2013). Thus, prudent and tailored financial regulatory reforms are important with respect to maintaining and stabilizing financial markets and institutions (Kim, 2013). Nevertheless, some scholars and practitioners argue that strong economic regulation and supervision are essential to the general examination of the role of financial regulation, while others support lax supervision (Piskorski, 2010). As a result, some of the financial regulatory reforms have been implemented within the banking sector. However, they vary by country. Among the regulatory measures applied are the supervision of banks by the private sector and the regulation of capital regarding the minimum amount required (Salotti, 2015). In addition, key indices such as guidelines on asset and liability diversification procedures have been added to the regulatory measures. According to Garcia, the complexity of financial tools, particularly for risk transfer, has contributed to the vulnerability of banking institutions and their increased vulnerability to small securities. (Garcia, 2013). As a result, sound prudential restrictions on financial transactions become more crucial to ensure stability within the financial sector. Its findings indicate that a financial crisis could be contained by strict entry conditions. However, Reinhart argues that a banking system with firm entry conditions increases its strength capacity. Indeed, current entry conditions protect the banking sector by preventing it from taking excessive risks and thus facilitating a competitive banking environment (Reinhart, 2011). regulatory reforms within the banking sector in 143 countries (Salotti, 2015). The results showed that regulatory restrictions within the banking sector regarding insurance, the real estate market and securities mainly contributed to the financial crisis of 2007-2009. This is because there were no strict entry requirements. Generally, entry requirements indicate what one needs to obtain a banking license, unlike diversification which assesses the suitability and correct procedures and guidelines for carrying out asset diversificationand allow the bank to make loans to foreign countries. Typically, investment regulation measures the extent to which banking institutions adopt prudential limitations, particularly on required assets. On the other hand, private monitoring measured the extent to which financial regulatory reforms allow the private banking sector to closely monitor commercial institutions. This is why, according to research conducted by Shleifer, capital regulation can also lead to a financial crisis. Indeed, the strengthening of capital regulations destabilizes financial institutions. A study on banking instability, conducted by Shleifer, found that the measure of public financial institutions has a higher degree to which banking sector assets are held by the government. Therefore, state-owned financial institutions are more likely to experience a crisis. Indeed, some government officials may not have the adequate skills to manage the institution, which makes the banking institution less competitive. A less competitive banking sector is weak, making it difficult for the country to defend its local currency in the event of a crisis in the foreign exchange markets. Financial Innovation Among the many studies conducted on the causes of a crisis within the financial sector, only a few explore the effects of progress within the financial sector. This may be due to the vagueness of the definition of financial innovation or the lack of readily available information (Piskorski, 2010). Various studies on financial innovation mainly use the number of patents to measure the level of innovation. Therefore, the pragmatic approach adopted by this study effectively calculated the overall index as a proxy indicator that was used to assess the extent of progress made within the financial sector in each particular country. The study used available international data to create a unique picture to determine the impact of financial modernization with respect to the role played by financial markets in causing unrest within the banking sector in 2007-2009. Financial crisis in 2007-2009The global economic crisis of 2007-2009 led to a global collapse of the economy and, consequently, a loss of assurance of the financial system (Cihak, 2013). However, despite some positive and critical economic indicators, the global economy remains uncertain and fragile. The recent global financial crisis is expected to cause a drastic economic downfall that will spread from one country to another. For example, in the case of the sovereign debt crisis in Greece, several countries in Europe and beyond suffered serious and contagious effects due to the crisis. However, the severity and scale of the impact of the financial crisis varies from country to country. other. This therefore raises a fundamental research question of assessing and determining the key factors that affect the degree and frequency of occurrence of unrest within the financial sector and, by extension, the causes of a financial crisis within the banking sector in 2007-2009. Several studies by academics, practitioners, and financial markets and institutions have indicated that hyperactive advancements within the banking sector and deregulation of the business sector have been attributed to different types of crises, particularly in recent decades ( Allen, 2012). For example, the inability of financial regulatory and supervisory agencies to keep up with the rapid development of the financial sector, its products and its practices, has played an important role in the intensification of financial crises. In addition, the guidelines.

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