Global Financial Crisis and Impact on Indian Economy
Global Financial Crisis and Impact on
Indian Economy
ABSTRACT
Financial crisis means a sudden change in the financial stability in the country, a situation where some of the huge financial institutions suddenly lose a large part of their assets. Some financial crisis may be due to the down turn of banking institutions, or may be due to stock market crashes or bubble, or huge inflation, or sovereign default, etc. The various economic activities such as production, employment, saving, investment, consumption etc are being badly affected and thereby the economy of the country as well as an individual do undergo a downturn during the crisis. The Reasons for the crisis are varied and complex. Some of them include boom in the housing market, speculation, high risk mortgage loans and lending practices, securitization practices, inaccurate credit ratings and poor regulation. Due to Globalization, the Indian economy cannot be insulated from the financial crisis in the developed economies. The financial sector including the banking sector, equity markets, external commercial borrowings and remittances has not remained unscathed though fortunately, the Indian banking sector was not overly exposed to crisis. The expectations of a G-2 world order comprising the US and China has raised concerns in India, but the fact remains that a solution to the global financial crisis cannot be reached without taking India on board. India is the most successful example of a democracy in South Asia and is an Asian giant its own right. This paper is made an attempt to analyze the causes and impact of financial crisis on IndianEconomy.
INTRODUCTION The term financial crisis refers to the loss of confidence in a country 's currency or other financial assets causing international investors to withdraw their funds from the country. Financial crisis means a sudden change in the financial stability in the country, a situation where some of the huge financial
Indian Economy
ABSTRACT
Financial crisis means a sudden change in the financial stability in the country, a situation where some of the huge financial institutions suddenly lose a large part of their assets. Some financial crisis may be due to the down turn of banking institutions, or may be due to stock market crashes or bubble, or huge inflation, or sovereign default, etc. The various economic activities such as production, employment, saving, investment, consumption etc are being badly affected and thereby the economy of the country as well as an individual do undergo a downturn during the crisis. The Reasons for the crisis are varied and complex. Some of them include boom in the housing market, speculation, high risk mortgage loans and lending practices, securitization practices, inaccurate credit ratings and poor regulation. Due to Globalization, the Indian economy cannot be insulated from the financial crisis in the developed economies. The financial sector including the banking sector, equity markets, external commercial borrowings and remittances has not remained unscathed though fortunately, the Indian banking sector was not overly exposed to crisis. The expectations of a G-2 world order comprising the US and China has raised concerns in India, but the fact remains that a solution to the global financial crisis cannot be reached without taking India on board. India is the most successful example of a democracy in South Asia and is an Asian giant its own right. This paper is made an attempt to analyze the causes and impact of financial crisis on IndianEconomy.
INTRODUCTION The term financial crisis refers to the loss of confidence in a country 's currency or other financial assets causing international investors to withdraw their funds from the country. Financial crisis means a sudden change in the financial stability in the country, a situation where some of the huge financial
References: 1. Arjun k. Sengupta, “the financial crisis and the indian response”, the hindu, october 24, 2008 2. Fi criteria: bank rating analysis methodology profile, march 18, 2004 ; bcbs. December 2009. P. 15. 3. Danielson jon, 2002the emperor has no clothes: limits to risk modeling, journal of banking and finance,2002;26. Pp1273-96 4. .bulletin of economics and statistics, vol. 51 (3), pp. 599-623