Conference Topic Ppt

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IMPACT OF FINANCIAL CRISIS

ON SERVICE SECTOR

BY

NADEEM KHAN

GAURAV SIKKA

DEPT. OF BUSINESS ADMINISTRATION



The world has many of the former global financial crisis, but thistime the global financial crisis of 2008-09 began actually in july2007. The world is undergoing the worst global financial crisis after the economic crisis of the great depression (1929), where the

implications of the crisis spread from america. American economyis the example of service economy. The service economy are thoseeconomy are those economy which have 51% of share of servicesin economy and american economy is the example of service

economy because it has over 50% share of services in economythe source of the crisis to europe and other developed anddeveloping countries and the arab countries.



The global financial crisis of 2008-09 began actually in july 2007(wall street journal,2007) when a loss of confidence by investors inthe value of securitized mortgages in the united states result in a

liquidity crisis that prompted a substantial injection of capital intofinancial markets by the united states federal reserve bank of england and the european central bank (norsis 2007 elliott 2008)with the growing bubble investment banks have become more in

need of liquidity which called upon them to lend to those who donot have any credit history or who are considered high-risks ratiosand found the sovereign investment funds and non US companiesan opportunity to invest in US bonds with insurance throughfinancial instruments and therefore the burden is transferred fromthe united states to other major countries and rich countries thathave investment funds. This financial crisis effect less on indianeconomy rather than american economy due to the credit policiesin both the countries.



The roots of financial crisis began in the late seventies and earlyeigties at liberalizing the financial system in both the US and britainof the restrictions on the currency leading to the transactions of liquidity and capital between countries and confine the role of

central banks to move interest rates and thus took control of monetary theory and shrinking role of government in the economyof respect for the monetary theory as people moved away from thekeynesian school. This was followed by the emergence of thefinancial model for shultz in the united states in 1973 which is

used as a basis to evaluative the derivatives which havecontributed to the emergence of many inventions in the financialinstruments that help lenders the ability to provide risk and theconsequent proliferation of these tools had led to the emergence of markets & insurance companies.



In 1999 when the U.S. government tend to abolish the law of Glass-Stiegman which was issued in 1933, has grown the world's giantinvestment banks rely to invest in real estate as a major or totalincome, where the investment bank after the signing of the contractdirectly to the infusion to be able to lend to others through thepooling of these loans are in bonds sold to others and get them onthe liquidity of the loan again, was adopted by the investment

banks, insurance system on the debt to the insurance companiesThis led to the emergence of giant companies such as AIG, whichnearly bankrupt without the support of a loan of $ 20 billion, andwas even a few years, investment banks such as Lehman Brothers

and Merrill Lynch by example in the world.



Operational definition of financial sector :- The financial

companies listed on the stock exchange which is traded in themarket whether in first (IPO) or second market including the banks

sector, insurance, diversified financial services and real estate.

The industrial sector :- The industrial companies listed in stockexchange which is traded in the market either the first or the

second sector includes leather, textile & the electrical industries.



The service sector:- Service sector companies listed in stock

exchange which is traded in the market either the first or secondsector includes technology and communications sector and the

benefits of energy.

The stock exchange:- A security exchange is the only formalmarket for trading securities in the country.

The financial crisis:- A sharp and sudden disruption in nsomeeconomic balances followed the collapse of a no. of financial

institutions to extend its effects to other sectors.



The index:- Indicators show the prices of stocks and are used to

measure changes in stock prices during a certain period comparewith the other.



Q1 What is the impact of the global financial crisis on the banking

system ?

Q2) What is the impact of the global financial crisis on the insurancesector ?

Q3) What is the impact of financial crisis on the diversified financial

services sector ?

Q4) What is the impact of global financial crisis on real estate sector ?



Q5) What is the most affecting sector between between the financialsector as a result of financial crisis ?

Q6) To what extent the financial sector companies affected as a resultof the global financial crisis compared to the companies registeredin the stock exchange ?

Q7) What is the impact of the global financial crisis on the economy of the country ?



The problem of the study lies in identifying the effects of the global

financial crisis on the financial sector in general and its constituentsector in particular because the impact of global financial crisis is

wider.



1) The problem studied is modern and emergency.

2) Lack of sufficient previous studies of the topic.

3) Difficulty of communication with officials to take their views becauseof the sensitivity of the subject.

4) To identify the most sensitive sectors.

5) To collect the proper data because of the size of the matter or sizeof the topic.



The financial crisis is a sharp and sudden disruption in someeconomic balances followed the collapse of no. of financialinstitutions to extend its effects to other sectors. The globalfinancial crisis 2008-09 spread from america to the other developed

and developing country when the demand for home declined priceshave decreased by 16% in the past two years in america with adecline in property prices, the owner is unable to repay the debtbegan moving property losses to the bank who was convicted byan investment firm that bought the financial crisis in the world. It

affect most of the american economy and european countrieseconomy. In india it affect not more due to the credit policy of indiabut it affect or crash the share market from 22,000 to 8,000 whichdid not recover till now.



THANK YOU

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