UK view of international/regional/domestic financial crisis - 1375 Words

UK view of international/regional/domestic financial crisis (Essay Sample) Content: NameCourseTutorDateNational profileEconomy is a critical issue in each nation. Economy can be defined to be the system that takes into account the production and distribution of good and services as well as consumption. In order to ascertain the rate of development a nation, one needs to copy the rates of economy as well as other aspects that constitutes to the development. In this research paper, one will be required to compare his or her nation in terms of the economy. This implies that one will be have to compile his or her national profile in order to tell the position of his or her nation. (The paper will mainly view the position of UK and compared to other nations)UK view of international/regional/domestic financial crisisTo begin with, financial crisis can be defined to an unstable situation of extreme danger or difficulty that affect the rate under which nations can transact business. This implies that the exchange rates can be affected hence affect the way a nation can transact business with other nations. For instance, in the global market, the US dollar is the most preferred exchange by many nations. When financial crisis has being experienced, the rate under which the dollar will be exchanged to another currency will automatically differ. This financial lapse is likely to be reflected in my sectors of a nation.Declining of equity prices of good and services in UKAfter the 2007 financial crisis in US, almost all global regions felt the effects. The equity market prices for commodities and services fell down globally. This implies that the global capital flows was consequently affected whereby there was a depreciation in exchange rates. For instance, The Economic Commission for Europe (ECE) region, particularly the Eastern Europe had a substantial exposure to the foreign capital where by it declined the UKà ¢Ã¢â€š ¬s market prices for goods and services for almost forty percent. This was contrary to the Economic and social commission for western Asia (ESCWA) region that exhibited developed. In fact, it may have been attributed by the implementation of the wide range of regulatory reforms after the 1997 financial crisis in Asia.Generally, if a developed nation (a nation with high index rate of developed) transact business with a less developed nation, it is likely to experience some demerits like it market price for goods and services being lowered. This graph can assist in developing the sense as a matter of bearing comparisons of regional markets.Regional market equity indices between 19th Sept 2008, and 16thApril 2009ExplanationsBased on the provided market indices for the four regions, it clear that the must be a Foreign Direct Investment (FDI) under which the rate of business transaction will be transacted. This is likely to affect a developed country by lowering its market prices. Over the last decade, UK has experienced a drop in FDI, which has consequently triggered a fall in commodity prices.Solution for UKà ¢Ã¢â€š ¬s international/regional/domestic financial crisisJust like any other nation in the globe, UK has responded to the economic crisis by cutting the interests rates, and accordingly injecting more liquidity into the financial system. Actually, the UK central bank has lowered the reserved requirements for its citizens; guaranties for bank deposits have ready provided. Similarly, the UK government has guaranteed loans for it citizens in order to facilitate advancing and recover the flow of credit. This method is found to be working effectively in the nations (UK); inflation is drastically replaced by deflation.The current ethical/religious/cultural characteristic (the migration and immigration departments in UK)With the imbalance trade rates, the developed nations such as UK do not see the need to transact much business with the developing nations owing to the lose they are getting from the business. This has made the developing nations to develop conflicts to an extent the y tend to do the opposite of what the developed nation ascribes. For instance, in the recent past, there have been increasing rates of terrorism, which have been attributed by the grudge the developing nation holds against developed nations. Due to this this, the security measures have been implemented to ensure that a nation is safe both economically and socially.In UK, migration and immigration departments do ensure that before an individual in allowed in the country. He or she is to meet some ethical and economic standards. For instance, one has to have a good bank statement as well as documents to prove that he or she may not cause a threat to the UK government. Having met this, one is then given a UK visa to pay a visit to the nation. In many occasion, is meant to show that the individual will not be a liability to the nation.Rising protectionismThere have been rising concerned that the government should protect itself from recession-hit nations. This has created protection pre ssures that have raised deductions that negotiations needs to be carried out. World Trade Organizations (WTO) has been at the forefront to settle trade conflicts across the globe. In some rare cases, the trade have been left more vulnerable making it the responsibility of a given nation to come up with its own measures. Therefore, many countries including UK have come up with a strategy to protect its economy through fiscal stimulus packages. For instance, in September 2008, the WTO implemented forty-seven related measures and proposed another additional thirty-three measures to govern trading unions. This can be evident in the ECE regions where China and India have imposed stringent measures regarding imports. Similarly, in Indonesia, one needs to have a licence in order to import a product. These measures typically affects the textile, toys, footwear, electronic, food and beverage industries. It is for this reason, protectionism pressures has intensely increased over strong growt h of the economy during the recovery session. Thus, this brand, WTO a significant institution that trade and development linkages can be established through rule-based system that suits multilateral trade regions.Effects of the societal conflicts between UK and other nations in terms of functionality of the stateBecause of the societal conflicts between the UK and other nations, falling global demands of goods and services having experiences. This has dried up trade finances dramatically to an extent the rates under which trade is transacted has gone down. This has led to establishment of trade regions that exhibits almost the same characteristics. In this way, the measures that governs export and import of products have been developed. Countries in the same trade region, tends to have business transactions amongst themselves as opposed to having trade with other nations from different regions. It clear that many nations bring their products at the global market with an intention to earn foreign income that can be used to improve its economy. As mention earlier, that when there is an imbalance in trade exchange rates, the developed nation will incur lose while transacting business with less developed nation. As a result, the market price for the commodity of the service will have to go ...