The Impact Of European Sovereign Debt Crises Finance Essay - Free Essay Example

Sample details Pages: 7 Words: 1970 Downloads: 1 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? The Greek government-debt crisis caused the European sovereign-debt crises. Because of the Greek Until the end of 2011, nearly three years after European sovereign debt crisis erupted. The speed of its contagion and promotion never stop. Don’t waste time! Our writers will create an original "The Impact Of European Sovereign Debt Crises Finance Essay" essay for you Create order This crisis showed a dangerous signal contagion which is also a very important theme. From Italy to Spain, and even France to Germany, two largest economy of the euro-zone is also difficult to protect themselves. And the performance of the contagion effect the world economies include rating agencies downgrade the credit rating of euro-zone countries; reduced liquidity of the banking industry; loss of market confidence. Moreover, as the European sovereign-debt crisis have affected the global economy, leading the IMF Director, Christine Lagarde, to warn in January 2012 that the world could be headed to a 1930s moment II if the crisis cannot stop(Tim Christensen, 2012). The purpose of this essay is to discuss the impact of European sovereign debt crisis on the financial markets, especially in equity markets, bond markets and foreign exchange. Main body Investpedia indicates that Bond market is an environment in which the issuance and trading of debt securities occurs. The bond market including long term Treasuries, corporate bonds, municipal bond, mortgage debt and federal agency debt. It is an indispensable part in the financial system for one country. A unified, mature bond market can be used as a financing tool for investors and raisers to provide low risk investment. Therefore, the bond market is also an important carrier of the central bank monetary policy. National Bank of Greece is the largest Bank in Greece. Before Greek debt crisis erupts, this banks tier one capital adequacy can reach 11% (George Pagoulatos ¼Ãƒâ€¦Ã¢â‚¬â„¢Lucia Quaglia, 2010). Unfortunately, this Bank hold ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬18 billion Greek bonds. Once the Geek bonds restructuring, those bonds will be substantial depreciation and the Bank will suffer a great lost. Some large Greek abroad financial institutions also hold a large numb er of the Greek national bonds. For example, BNP Paribas Peregrine hold ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬5 billion and Commerzbank respectively hold ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬3 billion Greek bonds. Similarly, the situation of Royal bank of Scotland was worse than Greek in 2011. The bank hold ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬64 billions of Irish bonds, ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬12 billion bonds of them were already defaulted. This banks total assets at the end of 2010 were expected to reach ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬58 billion. Although this bank already got the British governments bailout, if the Irish bond problem get worse, then the bank will face bankruptcy. It can be suggested that the European sovereign debt crisis will be of incalculable influence on the bond market. Greek as one small economy of the euro-zone. If its bond write off, then the holders may have a great losses. On the other side, once the bond of some large economies (such as Italy, Spain) writ e-off, the global financial crisis would be caused again. Furthermore, the impact of European sovereign debt crisis on the bond market has been contagion to the peripheral euro-zone countries. For example, Austria and Hungary sovereign debt rose, central European countries exchange rate fell. It could be argued that contagion is an important factor for the European sovereign debt crisis. The European sovereign debt crisis would cause the whole euro-zone risk appetites fell, various funds will choose the low risk assets and steady income assets. As bonds invest have stable income, higher safety factor and also has strong liquidity. Bonds will certainly become an inevitable choice. Because the bank assets were less than the debt, it has no ability to pay off the debt. So the issue of bond interest rate will be higher. Just as the bank need money, so it willing to pay a high interest rates to borrow. In other words, according to demand exceeds supply theory, when the market is very short of money, then the interest rates become higher is inevitable. Don not think that high interest have to be good. When bank default, the investors cannot get back their money. This is also one cause of European sovereign debt crisis. Borrow too much, unable to pay. It can be suggested that the long-term bond market will be remain down if the European sovereign debt crisis still not solved. At the same time, investors confidence would be hit. Investpedia points out that Foreign exchange means the exchange of one currency for another, or the conversion of one currency into another currency. Increasing globalization has led to a massive increase in the number of foreign exchange transactions in recent decades. The global foreign exchange market is by far the largest financial market, with average daily volumes in the trillions of dollars(Yang Zheyu, 2012). Until the end of June 2011, Chinas national foreign exchange reserve was close to 3.2 trillion dollars, which were growth u p to 30.3%. According to the analysis, about 60-70 percent of China reserves were dollar assets, 10-20 percent of that were euro assets. If euro assets accounted to 15%, which means the scale of the euro assets would be roughly $480 billion. Chinas euros reserves would be substantial reduced, if the euro assets dropping sharply. It can be argued that the foreign exchange reserves of China would be effected by the European sovereign debt crisis. From the aspect of the global reserve currency, global foreign exchange reserves suggests that since the sub-prime crisis the proportion of dollars dropped from 65.3% to 61.5% during 2007-2011. Euros rose from 25.2% to 27.2% in the same period. Overall, it would be a slow process to adjust the global reserve currency. Fortunately, the euro can keep its second reserve status for the foreseeable future. It could be suggested that if the European sovereign debt crisis cannot be solved, leading to the fluctuations of the global foreign exchang e market. It would also impact on the Euro-zone economy and the Euro itself. In the future, dollar and the yen will continue to be the popular hedge currency in the market. While the other major risk currencies such as euro, sterling and australian dollar, and so on will continue to be trapped in the down market. Besides, even more worrying is that the ECB does not play an important role in resolving the crisis. Benefit from the European sovereign debt crisis, dollars kept rising and the greenback was rising against the other big global currencies. European sovereign debt crisis had the largest affect on the foreign exchange market. This crisis is the important factor to make the euro sold a lot. As the U.S. dollars gradually returning to a strong position, which will let the price of the international oil and silver go down. Significantly, if the problem of the European become complicated, the worlds major economies would be dragged down. Such as the United States and China. It can be easy to find out that contagion is an important theme for European sovereign debt crisis. Then, lack of confidence for the future would effect on market sentiment. Therefore, no matter the foreign exchange market, the stock market, the bond market or the precious metals market will be all fluctuate and adjust widely. Investpedia indicates that the Equity market means in which shares are issued and traded either through exchanges or over-the-counter markets. It is one of the most vital areas of a market economy as it provides companies with access to capital and investors with a slice of ownership in the company and the potential of gains based on the companys future performance. In 2011, European sovereign debt crisis continued to escalate. From comparing the public government debt to GDP ratio, the Europe has been reached 87% in general. Besides, the situation in America was worse than Europe (more than 100%). And Japan (reached 219%) was one of the most heavies indebted governments in the developed economies(Tyler Durden, 2011). In another word, the debt crisis would bring great influence in developed economies and even the worldwide. Pengbo Agency(2011) states that global equity market has lost roughly 12.1% in 2011, approximately 6.3 trillion dollars disappeared and the market value decreased to 45.7 trillion dollars. Obviously the European countries became the worse zone of the world. The same year, Italy equity market dropped exceed 24%, France CAC40 index lost 17.66%, Germany DAX index fell 15.4%, and Greece share drop close to 52%. The Asia share closed down 18% at first time in three years. From the evidence explored so far it is clear that European sovereign debt crisis made the worldwide equity market going down. From the situation of global equity market 2011, it can be clear that before the third quarter the global equity market trend was all kept rise. But they all going down in march. Because of rising power is not enough, the stock trend of the second quarter was shock. The third quarter fell sharply to last year, even the year before last year level. At the fourth quarter, European and US equity markets went into shock. In contract, Asian equity markets still down. Besides, European sovereign debt crisis influenced the equity market of China. Those influences can be divided into two main ways. The one way was to cause the export decline and then influenced enterprises profit. Another one was to enhance the ability of financial market risk and then reduce the equity market value. So far the impact on exports has been quite obviously, corporate profits also have the big drops. As a result, the share price fell sharply. It can be argued that European sovereign debt crisis made the equity market of China decline. Interestingly, the situation of global equity market in 2011 was good. Even the strong American equity market only barely flat at the beginning of the year. And the level of European equity market and the Asia-pacific equity markets are lower than early 2011. Besides, the downgrade of the U.S.s triple-A credit rating made the whole years stock down. The evidence explored so far indicates that European debt problem always affects the equity market, plus all kinds of natural disasters and major factors making global equity market weakness. Overall, European sovereign debt crisis made the global equity market weakness. And also effect on the economy a lot. First, the debt crisis will plague the European economic growth for a long time, and restrictive the world economy; Second, if European sovereign debt crisis worsening, it will make the demand of European consumers pay and trade ability down; Thirdly, as the Greek unable to pay lending made them face economy collapse. Also, if Spain, Portugal and other countries cannot succeed through this debt crisis, will certainly effect on the EU economy and even the world economy. Based on the great harm the economy got from the debt crisis, this would affect investors confidence and passion. So the equity market must be weak. From the evidence explored so far it is clear that European sovereign debt crisis cannot be solved in short term. From the recent development of European sovereign debt crisis, Greece is hard to get out of euro-zone. And Spain banking problem become the new risk issue of the European debt crisis. At the same time, Italian bond yields continued to rise. It can be predicted that the debt crisis is hard to improve in the short term. In the long term, to solve this crisis not only depends on external assistance, but also depends on the crisis countries themselves. Previously, these crisis countries over-borrowing and over-pending was one of the reasons caused this debt crisis. Moreover, their government did not make the right policy to guide them. And even played a catalytic role in the wrong direction. Thus, the euro zone must be more cautious, strict and perfect on the aspect of instituti on building, rule-making and policy implementation. It could be suggested that the EU countries should join together to help each other. Especially to provide financial support for the debt-troubled countries. Beside, the debt-troubled countries should cut expenses and reduce the government budget deficit. And try to improve the economic environment for help themselves get out of the debt-trouble.

Women s Suffrage By Susan B. Anthony Essay - 1635 Words

Woman s Suffrage was the struggle for woman s right to vote and run for office. The mid 19th- Century women in different countries formed organizations to fight for suffrage. The first international woman s rights organization formed the International Council of Women (ICW) in 1888. In 1904, the International Woman Suffrage Alliance (IWSA) was formed by British woman s rights activist Millicent Fawcett, American activist Carrie Chapman Catt, and other leading woman s right activists. Susan B. Anthony played a huge role in the woman s suffrage, she had traveled around the country to give speeches, circulate petitions, and organize local woman s rights organization. Her family moved to Rochester, New York in 1845 and they became active in the antislavery movement. The antislavery Quakers met at their farm almost every Sunday, where Fredrick Douglass and William Lloyd Garrison sometimes joined. Susan was working as a teacher and became involved in the teacher s union when she discovere d that male teachers had a monthly salary of S10.00, while the female teachers earned $2.50 a month. Her sister and parents both attended the 1848 Rochester Woman s Rights Convention held on August 2. Her experience with the teacher s union, antislavery, and Quaker upbringing, made her realize that it was time for a career in woman s rights reform to grow. Her career began when she met Cady Stanton in Seneca Falls in 1851, Susan began her interest in the woman s rights afterShow MoreRelatedWomen s Suffrage By Susan B. Anthony891 Words   |  4 Pagesfamous and most powerful movement is â€Å"Women’s Suffrage†. The movement of women that call for their right to vote. Susan B. Anthony, the woman who influences in progress of women’s suffrage. Belief of Anthony effect on American society. Belief that everyone in society should be equal and she believe that she can create this equality. Anthony devoted herself to fight for women and to be the leader of womenâ€℠¢s suffrage. She can be the principle of women’s suffrage because problem of her family that made herRead MoreThe Women s Suffrage By Susan B. Anthony1195 Words   |  5 Pagesâ€Å"Trust me that as I ignore all law to help the slave, so will I ignore it all to protect an enslaved woman.† This quote by Susan B. Anthony, stated during the women’s suffrage movement, illustrates the hypocrisy women faced during the late 1800’s. Furthermore, it displays that women’s rights can be compared to that of an enslaved human being instead of a free United States citizen. Throughout American history gender inequality has been a prevalent, ongoing, concern. Sherna Berger Gluck’s novel, FromRead MoreWomen s Suffrage By Susan B. Anthony1724 Words   |  7 Pages â€Å"Women, we might as well be dogs baying the moon as petitioners without the right to vote!† These were the famous words of a key leader in the women’s Suffrage Movement, Susan B. Anthony. In the past, the rights guaranteed to men were not applied to women, and therefore caused great injustice. It wasn’t until the mid-1800s that women started to take a stand and fight for their voting rights. As a result, these actions caused a positive impact in our country and now, women have equal rights as menRead MoreWomen s Suffrage Movement : Susan B. Anthony1698 Words   |  7 Pages Men and women are supposed to be equals. Women are supposed to share equal rights and opportunities with males, but sometimes women experience discrimination and face inequality. (It’s not only women; people of different genders/sexual orientation, race, ethnicity, and etc. face discrimination still to this day). 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Anthony is an American icon known for her work with the Women Suffrage Movement she influenced the American culture and brought all American women a better future. Her legacy sculpted feminism and helped the community pave the way to equality. Susan B. Anthony was born an activist her family being involved in the Anti-SlaveryRead MoreCult of True Womanhood: Womens Suffrage1299 Words   |  6 PagesIn the 1840’s, most of American women were beginning to become agitated by the morals and values that were expected of womanhood. â€Å"Historians have named this the ’Cult of True Womanhood’: that is, the idea that the only ‘true’ woman was a pious, submissive wife and mother concerned exclusively with home and family† (History.com). Voting was only the right of men, but women were on the brink to let their voices be heard. 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Anthony and other female to join the â€Å"teacher union to fight for equal wages.† (â€Å"SusanBAnthony† par.5) Nevertheless there was one problem, - Susan B Anthony continued to fight for the teacher union actively but she had to end her career as a teacher. Under the circumstances, Susan B Anthony had taken a role

William and Ellen Craft Free Essays

3-7-2012 Running a Thousand Miles for Freedom By: William Craft and Ellen Craft Beginning in the principal slave state of Georgia, â€Å"Running a Thousand Miles for Freedom† details the adventure and eventual escape from slavery of William Kraft and his wife Ellen craft. In December of 1848, both received written passes from their owners allowing them a few days away together. They would make the most of it and never return to bondage. We will write a custom essay sample on William and Ellen Craft or any similar topic only for you Order Now Ellen craft was the daughter of her first master and as such was almost white. So much so that after being frequently mistaken as a child of the house she was given to a daughter, her half-sister, as a wedding present when she was 11 years old. Though both William and Ellen’s Masters were moderately humane; neither could stand the thought of marriage or children while being slaves. Ellen in particular, after being separated from her own mother at such a tender age, could not stomach the thought of her own child being taken away from her in a similar manner. But as they saw no escape from their positions, they eventually were married. William Kraft focuses on the adventure of their escape and how the mindset of American slaveholders seemed to continually oppress his race while giving written appreciation to those who helped in securing their freedom along the way. William, himself, was a cabinet maker who watched as his entire family was sold one by one for money or to pay his master’s debt. Through this great anguish or more so because of it, he devised a plan to disguise his nearly white wife as an invalid white gentleman and he as a servant slave to him. Leading up to their few days pass, William purchased Ellen’s disguise a piece at a time from different parts of the city. At the appointed time, she put on trousers, a gentleman’s jacket, and a top hat. Some bandages about her face, spectacles, and sling on her writing hand completed the outfit and their journey began. First they boarded a train to savannah, Georgia, and then took an omnibus to the steamer bound for Charleston, South Carolina. They traveled through Richmond to Baltimore, with not one person seeing through Ellen’s disguise though they were questioned several times and both were scared and sleep deprived. Their biggest test came in Baltimore while securing tickets to Philadelphia as this was the last port before they would arrive in a free state. William was questioned by an officer who saw him on the train and both he and Ellen had to satisfy the man that Ellen, playing the part of a Mr. Johnson, had the right to take his slave to Philadelphia with him for the purpose of seeking medical advice for Mr. Johnson’s supposed rheumatism. Through sheer will and determination they were able to continue this facade and allowed to board the train, where they arrived in the free state of Pennsylvania on Christmas day. With the enactment of the Fugitive Slave Bill their safety was no longer guaranteed and they left America after two years in Boston. They sailed to England, where they would live in exile for the next 19 years and have numerous children. They would be abolitionists, teachers, authors, and speakers for the rest of their lives. The author gives thanks to the abolitionists and the anti-slavery movement leaders by including their names and the specific event and manner in which their aid was given. He directly expresses how he and his wife could not have completed this journey without it. He is very descriptive yet conveys their story not from the perspective of a violated victim of slavery- but from an enlightened position of knowledge having overcame the trappings of bondage. It is of particular note the irony and shame of a country founded on the principles of freedom, having fought and died for that cause of escape from England, forcing these honorable human beings to that same country in order to preserve their own freedom. How to cite William and Ellen Craft, Essay examples

Compare and Contrast the Different Ways in Which Economic Development Affected Politics in Massachusetts and Virginia in the Period from 1607 to 1750. free essay sample

Honors US History I July 7, 2011 Essay Question: #3 Compare and contrast the different ways in which economic development affected politics in Massachusetts and Virginia in the period from 1607 to 1750. From all of the colonies that resulted from European expansion and conquest, perhaps the two most famous would be those of Virginia and Massachusetts. The economic development of Massachusetts and Virginia started in the same period of time but had many differences between them. Each was established by the similar groups of people but they had different eginnings, also a different view on religion, and different means economic stability, which created two different politics and economic systems. The settlements of Virginia and Massachusetts were both established about the same time, but the ways that they were established were incredibly different from each other. The first difference seen in the beginning of the colonies was caused by trial and error. The Virginia Companies had many failures and close calls, while Massachusetts has a successful first settlement y smart decisions regarding food and planning made this possible. We will write a custom essay sample on Compare and Contrast the Different Ways in Which Economic Development Affected Politics in Massachusetts and Virginia in the Period from 1607 to 1750. or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The second difference also occurred was leaderships in each company. Virginia did not have good leadership until John Smith came and started well thought out society based on a set of ideals made life easy to follow. Before the time being, Massachusetts had John Winthrop who successfully developed the settlement in the area. The third difference between the beginnings of Massachusetts and Virginia were the workers in the work forces. Virginia’s eople were lazy and relied on the native people. While Massachusetts was settled by hard working Puritans, who did not have as much problems with natives in the beginning. In conclusion, the differences in the settlement’s upbringing were not the only thing that divided the two colonies. Another reason why the colonies divided was the differ views on religion helped to shape the economy of both settlements. The Virginia and Massachusetts Companies both realized that they would need to have a strong economic system, but their vie ws on religion nd profit had too many differences and resulted in different systems. The most obvious difference between the colonies was the religion. The Puritans believed in self-control and no need for â€Å"excessive† profits. Virginia had problems with embezzling, overcharging, and the use of company laborers. The second difference between the colonies was the Native American relations. Virginia had problems with natives from the start. Massachusetts learned the best ways to survive in the area by watching and having good relationships with the natives. The third difference was the urban life. Both societies were impacted with an increase in immigrants, creating a competition for work. Boston was the worst and people looked to the community for help. In conclusion, all of the differences resulted in two economic systems that were successful, but very different. Both Virginia and Massachusetts had the same goal of colonial success and stability but their ways about securing the stability and gaining economic success and wealth reflected their previous established â€Å"morals and values†. The first difference was the establishment of plantations. Virginia began to establish plantations for tobacco and Massachusetts was a seaport. Both began to suffer from the increase of immigrants, which created more competition for work. This leads to the second difference, which was competition. The competition for work in each colony that each suffered but Virginia more than Massachusetts. The third difference was slavery. Virginia made its money through tobacco, and with that came an increase in slavery. Massachusetts did not have as great demand for slaves. In conclusion, although both of the settlements had different point of views, neither of them could avoid the problems from increase of immigration and both relied on their separate means of profit. In the end, it can be seen that both companies had similar goals and realized what needed to be done to make their colonies last, but the methods that they used was incredibly different in many ways. From Virginia and Massachusetts it can be proven that two colonies with the same goal can come to two separate political systems based off of their economic development.