International Banking and finance assignment

International Banking and finance assignment

Full name: Niyozov Jurabek

Faculty: Corporate Governance
Group: MO-89
Contact number: [phone]
E-mail address: [e-mail]

Topic:

The head of the International Monetary Fund has warned that a persistent violation of ethics among bankers and rising inequality pose a major threat to growth and financial stability.

27th May

Christine Lagarde told an audience in London that six years on from the deep financial crisis that engulfed the global economy, banks were resisting reform and still too focused on excessive risk taking to secure their bonuses at the expense of public trust.

Required:

1. 
   Critically discuss Largarde’s warning that too-big-to-fail among sine if the world’s largest financial institutions was still unresolved and remained a major source of systematic risk. Dscuss several risks associated with too big to fail institutions.
   

2. 
   Critically discuss the Pros and Cons of Breaking Up Big Banks
   

Christine Lagarde, manager of the International Monetary Fund, said at a conference on inclusive capitalism in 2014 that over the past six years, banks have resisted reform and have been overly committed to receiving bonuses at the expense of public confidence. . In my view, the too-big-to-fail problem among the world's largest financial institutions is still unresolved and continues to be a significant source of systemic risk. This essay analyzes the pros and cons of the collapse of large banks. First of all, the term "too big to crush" refers to companies so intertwined with the global economy that their collapse would be catastrophic. The expression became popular mainly during the financial crisis of 2008-2009 and was used to explain why certain financial enterprises had to be bailed out to prevent a global economic crisis. Bear Stearns was the first bank deemed too big to fail. The modest but well-known investment bank Bear Stearns owns a sizeable stake in mortgage-backed securities. To assuage fears that confidence in other banks would be lost when the mortgage-backed securities market collapsed, the Federal Reserve decided to buy JPMorgan Chase & Co. to buy Bear Stearns (JPM.N) with a $30 billion loan. Reduction legislation was passed Dodd-Frank Act The most radical financial reform, the Wall Street Reform Act (Dodd-Frank Act), laid the foundation for the investment banking crisis. The Council is monitoring dangers affecting the broader financial sector. In addition, it regulates non-banking financial institutions, including hedge funds. After the 2008 financial crisis, central banks, regulators and decision makers were forced to take exceptional measures. As a result, banks now own more capital, and the global financial system does not experience a splash of money. 2) Moreover, all this time, some economists and officials advocated the severing of ties between large banks and strict regulation of their size. The average size of US banks has increased over time, even as the total number of banks has declined. The average total assets of US commercial banks, adjusted for inflation, increased from $167 million in 1984 to $893 million in 2011, although the number of banks declined by more than 50%. banking sector. For example, in 2001, the five largest commercial banks, led by Bank of America, with $552 billion in assets, owned 30% of all assets in the US banking system. In contrast, in 2011, 48% of the system's assets were owned by the five largest banks. Four banks had assets in excess of $1 trillion, with JPMorgan Chase Bank, the largest commercial bank, having total assets of $1.8 trillion, or 14% of the total. The total assets of all US commercial banks. Big banks pose serious risks to the financial system and could be devastating to the economy as a whole, say bank limiters. The recent financial crisis and recession initially seemed to support this theory. Because only about 6% of small banks failed, and four of the ten largest depository institutions in the country (Bank of America, Citibank, Wachovia Bank, Washington Mutual Bank) failed. Or received government assistance to survive.