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Impact of Credit Crunch In UK

The paper is about Impact of Credit Crunch In UK. Current credit crunch have resulted to various factors including previous monetary policies undertaken by the Bank of England the deregulated the financial institutions and encouraged borrowing without putting any limitations.

language english
wordcount 2733 (cca 7.5 pages)
contextual quality N/A
language level N/A
price free
sources 9
Table of contents

Introduction 1
What is credit crunch? 1
The genesis of credit crunch 2
The UK credit crunch: issues and impacts 2
Conclusion 8
Reference: 9

Preview of the essay: Impact of Credit Crunch In UK

Impact of Credit Crunch In UK Introduction The 2007-8, credit crunch in the UK was a result of a sharp increase in the number of defaults on housing mortgages. Mainly these mortgages were in America, however the effects of the decline of funds spread across the whole world. As Ishikawa notes (2009) the UK has also been hit hard with the current credit crunch, the banks are not lending money and the number of defaulters is increasing. The question being asked is what blame should be attached to the Bank of England for the impact of the 2007-08 Credit Crunch on the UK economy? To answer this question, we shall begin by defining credit crunch, looking at its impacts and then finally analyzing the blame that should be put on Bank of England ...

... Mortgage backed securities (MBS) was another critical issue in causing the current financial crisis. Though, it might have been hard to prevent the credit crunch, the Bank of England is blamed for various misdeeds. Among them is that, the bank’s response was slow, its policy of reducing interest rates seems to be ineffective, it did not take quantitative easing measure quickly, it failed to effectively handle the Northern rock crisis, and more so its bailing of financial institutions in crisis was late. In worlds of Payne (2008) the mere fact that the Bank of England understood that, deregulating the financial system and allowing people to borrow money as they want is aspect very well, and yet we are facing credit crunch is a clear indication of its failure
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