Question

What caused the recent financial crisis in each of the following three (03) countries: USA, UK, and Germany? (There may be a number of factors). Explain briefly. In addition,

1. Explain briefly how the crisis unfolded in each of the three (03) countries.

2. Mention the key events related to the financial crisis that occurred in each of these three (03) countries.

Answer 1

The Financial crisis in three countries are a result of many factors affecing the economy of the counies .Below is the recent financial crisis and their causes and the event unfolded in these countries .

US - The recent financial cisis of US was of financial year 2007-2008 which is also known as the global financial crisis and it was a severe worldwide financial crisis since the great depression.The events unfloded was the US homemortage debt relative to the GDP increased from the average of about 46% in the 1990 to about 73% in the year 2008 reached to about $10.5 trilion.The IMF estimated that large bank of US lost about $1 trillion on the tocis asset and from bad loans The lack in the confidence of investor in the bank solvency and the declining credit avilability has led to the plummenting commodity price and stock in 2008 and early 2009 .

United Kingdom - The Britain suffered the biggest economy hit recently of G7 economy from the Novel coronavirus during the yea second quarter .The output collapsed by about 20% and also with this the finanical crisis caused the bank of england third quarter estimate to be around 7% which is below the pre crisis level.The net debt of public sector reached to about 2.0 trillion pounds or we can say that 101% of the GDP and this is the highest as a share of the economy since the financial year 1960 to 1961 .Also despite of the heavy borrowing the govt. of bristish interes cost on financial market are near the record lows and there is a long term fall in the interest rate . This was the recent financial crisis in UK so far .

Germany -Since the year 2009 when the country was engulfed in the global financial crisis,the economy of germany shrank by about 2.2 % in the frist quarter of this year due to COVID 19 which pushed it into recession.In order to recover it the govt. exit the lockdown as its first initiative to maintian the economy.The GDP of germany growth has been negative for the two succesive quarter .germany is the alrgest economy of EU.The event like consumer spending decline ,low investment ,affected govt. pending Also both the export and import trade of the geramany globally was lower so as a big power the financial crisis emerged out of this event unfolded.