On September 15, 2008, New York-based investment bank and financial services firm Lehman Brothers filed for Chapter 11 bankruptcy. The bankruptcy filing, which remains the largest in American history, had many far-reaching effects on both domestic and foreign economies. The bankruptcy of Lehman Brothers and resulting Credit Crisis of 2008 led to sweeping domestic financial regulatory reform. New legislation, such as the Dodd-Frank bill – coupled with the creation of the Consumer Financial Protection Bureau stand as two examples of measures the government took to guard against future disasters in the wake of this historic bankruptcy. Nevertheless, it took years for investor and consumer confidence to reenter the market.
Use the research you did in the Week 3 Literature Review as a foundation for this assignment. Write a six-to-eight-page paper in which you:
Describe how the crisis impacted other businesses.
Choose an industry that was hit the hardest or one that benefited from the collapse and describe how managers in that industry responded to the events.
Provide examples of lessons managers need to keep in mind in the post-2008 business environment.
Explain whether or not an event of this magnitude could occur again, given regulations implemented after the crisis.
Explain if the American economy is weaker or stronger today as a result of the Lehman Brothers’ bankruptcy and resulting reforms and provide an explanation.
Provide an example of how this monumental bankruptcy and the resulting credit crisis affected you or someone you know. For instance, you could share a decision you made about your career or investments, or how someone you knew or their business or management decisions were affected.
The adoption of austerity submit the financial disaster in 2010 through the UK authorities is heavily debated. This essay evaluates the arguments for and in opposition to this fiscal contraction deliberating at the applied and viable fiscal policy measures and the constraints of monetary policy after the monetary stimulus furnished in 2008. while the housing bubble burst and Lehman Brothers collapsed in 2008, the subprime loan crisis magnified right into a worldwide economic crisis. Governments had to rush in and shop banks. If no longer, the autumn of public confidence within the banking machine might have made the hassle a long way extra extreme. huge monetary stimulus packages had been rolled out to cushion the blow. but for how lengthy could a government be inclined to take similarly debt for expansionary monetary policy? they might have endured to increase public expenditure to compensate for the autumn in personal expenditure in accordance with the Keynesian principle. Or increase financial savings, allow the salary rate drop and feature the call for upward thrust because of a price benefit in the long run (Hayek, 2006). through 2010, uk’s country wide debt reached 75.6% of its GDP (Eurostat). Had bond yields elevated due to falling market confidence, the fiscal scenario might had been worse off. it'd suggest that the risk related to government bonds is better and have bad implications approximately the government’s credibility, all raising the cost of public debt inside the destiny. as a result, inside the 2010 elections, the campaigns of each the Conservative and Labour parties counseled decreasing the financial deficit. no person spoke in favour of in addition stimulus and austerity become adopted. the UK authorities feared a Greek-style meltdown. a rustic having borrowings in its personal currency and a friendly critical financial institution may not must fear public debt as lots. it may always maintain a manipulate on hobby fees or postpone repayment through issuing new bonds. but, then governor of the bank of britain, Mervyn King, appeared to favour austerity. It remains unsure if he would have sanctioned in addition quantitative easing. generally, critical banks lessen interest fees to stimulate the economic system in such conditions. decrease hobby prices promote consumption which might have reduced due to decrease monetary expenditure. The drop in hobby prices from five.five% in 2008 to 0.five% generated £350 billion to inject into the financial system (Giles, 2018). however with hobby costs at an 49f67066cd05458a974d4cc1f8ab519f of 0.five% since 2009, there wasn’t a lot that would be carried out on the monetary coverage front (bank of england). The drop in hobby prices from 5.5% in 2008 to 0.five% generated £350 billion to inject into the economic system. the cost introduced Tax (VAT) changed into raised to twenty% and public expenditure become reduce to bring down the deficit (Finch, 2010:1). The aggregate of extra sales and a decrease deficit could cut down the need for in addition debt and assist provider the present. Austere spending choices lowered the welfare expenditure. The employment stage decreased due to decrease government expenditure. As a end result, call for plunged and so did the gross domestic product. excessive uncertainty had lowered the general public self assurance. The GDP growth rate become inadequate to counter the shrinking in the financial system resulting from austerity. global financial Fund (2012) warned that the country might face permanent damage to its efficient capacity if the identical policies have been persevered. The authorities’s tax revenues took a success owing to lower output. This resulted in a higher debt to GDP ratio as the budgetary deficit grew. As actual wages of public sector wor>GET ANSWER