The Global Financial Crisis Essay Example | Topics and Well Written Essays - 3750 words

The Global Financial Crisis - Essay Example As the discussion declares there are similarities in the regulatory responses that have been given by different nations to the current financial crisis. The responses mainly touch on improved liquidity, management of risks, and lowering leverages. Enhanced insurance on investment and banking sector are other key response. The effects were severe in the developed countries like United States. In this regard, different countries reacted to the crisis identifying the opportunities and the associated challenges. The countries in the OECD advocated for a joint effort to have international standardization of regulatory policies. The main concerns are stimulation of demand in a given economy, improving liquidity, preventing foreclosures of mortgages and improving access to financing by for the SMEs and giant investors. There is a focus in risk reduction through investment in insurance. From this paper it is clear that the current global crisis began in 2007, in some countries, and deepened in 2008.1 Some of the factors that may contribute to financial crisis include application of similar operational strategies by players in the market, changes in the banking business, excessive leverage, changes in regulations and corporate governance, and failure of government policies on the financial sector. Government policies regulate the financial sector within in a country and the operations with a global business partner. The failures in some of these policies could have contributed greatly to the current situation. To fix the situation and mitigate for future crises, various governments have enacted some monetary policies. The current global financial crisis had other related problems like food crisis especially to the developing countries as was, and continues to be, witnessed in the horn of Africa.3 The financial reforms to manage the crisis must then focus on the other financial instruments controlling the economy of the country.