role of investment banks during the 2008 financial crisis
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Write around 300 words about the role of investment banks during the 2008 financial crisis
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- 4 Investment banks’ risk-taking behaviour was the main cause of the financial crash of 2008. Discuss and critically analyse the explanations for such behaviour. In answering this question, relate your discussion to the literature covered in the lectures. .( excluding the graph if any used)A bank has $5 million in liquid assets and $95 million in nonliquid assets. Large depositors unexpectedly withdraw $9 million in deposits. To cover the withdrawals the bank sells all of its liquid assets at book value but must sell $7 million at less than their book value of their nonliquid assets to raise the additional funds needs. As a result the bank's equity will Fall $3 million Fall $4 million Fall $7 million Remain unchanged Rise $5 millionExplain why traditional banking has been on the decline in recent years.
- Question 9?In 2008, the United States began to witness one of the worst recessions since the 1930s. The collapse of the housing bubble in 2006 led to a massive decline in real estate prices, affecting consumers and institutions, especially banking and financial entities. Severe liquidity shortfalls in the United States as well as other global markets led to a serious credit crisis. During the credit crisis of 2008-2009, several banks and other businesses went through a reorganization process or were forced to liquidate. Consider the following example: In January 2009, American electronics retailer Circuit City Inc. closed all of its stores and sold all of its merchandise. Source: "Circuit City to Shut Down." CNN Money. Cable News Network, n.d. Web. August 31, 2010. http://money.cnn.com/2009/01/16/news/companies/circuit_city This is an example of: O Reorganization O LiquidationThe financial system can be best described as:A. A computer system that is used to process trades/transactions byparticipants in financial markets and/or institutions.B. Financial markets plus institutions.C. Participants and players in financial markets and the direct route forchanneling funds in the economy from the surplus agents to deficitagents.2. Ion National Bank issues a 6-month, USD 1 million CD at 4.0% andfunds a loan in Argentine pesos (ARS) at 6.5%. The spot rate for theARS was ARS 2.27 per USD at the time of the transaction. In 6 months,the ARS will have depreciated to ARS 2.30 per USD. What is therealized nominal annual spread on the loan?A. -1.07%B. -0.19%C. 0.11%3. Based on semiannual compounding, what would the price be of a 13-year, 10% coupon, and $1,000 par value bond that is currently yielding9.25%? A. 1,036.03 B. 1,055.41 C. 1,056.05 4. What is the price of a T-bill that has a bank discount yield of 5%, a$100,000 face value and a 180 day holding…
- Give detailed accounts of the following financial crises: The Japanese Banking Crisis of the 1990s The Asian Crisis of the mid 1990s The current global financial crisis. You should include the causes of the crises, providing examples where necessary and citations of any relevant papers.Financial institutions are exposed to various types of risk. With practical examples, discuss any four types of investment risk that commercial banks are exposed to. (Your answer should not exceed 800 words)The financial regulations governing the banking sector and most importantly mortgage-backed asset, did not prevent or alleviated the financial collapse in 2008/9? Critically discuss?
- The most recent banking crisis happened in March 2023, when three small and medium-sized banks in the U.S. failed. Among the banks that collapsed was Silicon Valley Bank (SVB). As reported in a Bloomberg Law article (Pollard, 2023), SVB was founded in 1983 and the bank had about US$209 billion in total assets and about US$175.4 billion in total deposits at the end of 2022. It is important to note that there are usually several factors (both internal and external) that can cause a firm to enter into administration, which are not related to the audit quality. In relation to SVB, Professor Ramasastry (2023) from the University of Washington provided insights into why SVB failed and why bank failures are difficult to predict (see references below for the link). However, in cases where the client company fails, Kadous (2000) finds that the auditor is more likely to be found "guilty" even when they provided higher-quality audits. This points to the expectation gap relating to audits of…t Start with the Wednesday balance sheet for The Friendly Bank shown below (page 322 in the text). Suppose on Thursday, the Fed buys $100 in government bonds. Complete entries for Thursday and Friday, assuming everyone behaves the same way as in the text. Balance Sheet on Wednesday C R D MB M2 Asset Liabilities R 680 D 1280 320 680 1280 1000 1600 L 600 Balance Sheet on Thursday C R D MB M2 Asset Liabilities Balance Sheet on Friday C R D MB M2 Asset LiabilitiesI need help soon as possible you need to use the first text book page 322 and half of 323
