加拿大金融保险留学essay [5]
论文作者:英语论文论文属性:短文 essay登出时间:2014-12-07编辑:yangcheng点击率:23319
论文字数:7622论文编号:org201412042311298650语种:英语 English地区:加拿大价格:免费论文
关键词:加拿大留学论文金融保险Insurance Financial过度风险
摘要:本文是一篇加拿大金融保险留学essay,存款保险制度在促进经济金融的稳定中发挥了非常重要的作用。在全球范围内大多数发展中国家有存款担保制度。
a failure to do so may lead to a systemic risk. The government announced full guarantee to its consumers. There are arguments that the northern rock should be allowed to fail in order to maintain market discipline but on the other hand in failing to do so may have lead to a systemic crisis. A serious consideration must be made when the regulators intervene to protect the large banks as it undermines the market discipline. These situations must be handled with care so it doesn't affect the future discipline.
1. CAUSES AND CONSEQUENCES OF NORTHERN ROCK CRISIS
We see the causes and consequences of the crisis. There are various lessons been learned from the crisis. We focus on the deposit insurance system and analyse a corrective measure. The deposit insurance arrangement in UK was criticised by many economists. The FSCS until September 2007 protected 100% of the first 2000 and 90% to the next 33000. The UK government widened its policy after the bank run, protected 100% of the 35000. Northern Rock was formed on 1965 as a building society, it became a limited company on October 1997. Residential mortgage lending was the major business activity, offering deposit contracts and insurance products were the other business activity of the bank. The business grew rapidly, was the 5th largest mortgage lending bank in United Kingdom. The bank was nationalised in 2008 after the crisis.
1. 1 THE CRISIS
The Northern Rock bank had liquidity problems during September 2007 and obtained support from the bank of England as it is the lender of last resort for the UK banks. The bank only had liquidity problems but it remained solvent. The run on the bank caused serious liquidity problems to the bank. The consumers did not feel safe about the money in the bank, Fear that the bank would fail triggered the bank run. The maximum amount of protection was 31,700 during the event on the bank going bust, financial system of UK was at a great risk at the time of crisis.
1.2 BANKS FUNDING STRATEGY
I will now put in front the reason why the bank had the liquidity problem as it was the main reason for the crisis. The northern rocks core business was mortgage lending. The bank used securitisation process to raise its funds, it involved a special purpose vehicle (SPV) called granite which was used as the securitisation vehicle to raise funds. (House of Commons fifth report 2007-2008). Granite is our securitisation vehicle. Securitisation, according to the Northern Rock chief executive
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