The impact and recovery of UK financial sector after the financial crisis in 2008
- Background information
Financial crises are harmful and transmittable, and persuading needs for fast policy responses. The recent global financial crisis in 2008 significantly impacted many economies across the globe. Almost all of the affected economies were unable to evade deep economic recessions and drastic reversals in current accounts[1]. The financial crisis commenced in the United States before spreading to other countries including the United Kingdom. This crisis did not only affect the general economy in the affected countries, but also their financial sectors[2]. This topic area offers an opportunity to comprehend how it is challenging to address financial crisis and stimulate economic recovery.
- Nature of submitted work (nature or rationale for final report)
The nature of this draft is a report focusing on the effects and recovery of the UK financial sector after the financial crisis in 2008. The report will explore and examine the relevant main aspects related to the topic under study. The final report will not only focus on the impacts and recovery, but also the current trends in the UK financial sector.
- Aims & objectives (or hypothesis)
- Statement of aim
The aim of this report is to review impact and recovery of UK financial sector after the financial crisis in 2008.
- Objectives
The objectives of the reports are:
- To review the impact of the financial crisis in 2008 on the UK financial sector
- To review the recovery of the UK financial sector after the financial crisis in 2008
- To examine by research current trends in the UK financial sector and the ability to respond effectively to financial crisis
- Initial literature review
Although the global financial crisis was apparently witnessed in 2008, it originated at the start of 1970s and accelerated in 1980s perhaps due to deregulation of financial markets in various economies including the UK, the US, and other Western countries. The act of deregulation not only eliminated numerous regulatory controls, but also allowed many organizations and institutions to trade across a broader array of territories and activities[3]. As a consequence, credits were highly liberalized and personal debt drastically expanded, which in turn exposed financial sector and financial institutions to a greater risk.
Even after the 2008 global financial crisis, economies and financial sectors in different economies have experienced slow recovery. For instance, the global gross domestic product (GDP) growth in 2009 (after the crisis) was 5.8% less than growth in 2007 (before the crisis) in developed, developing, and emerging economies[4].
Solomon explains how economic recovery in the United States and the leading European Union (EU) economies including France, Germany, Italy, Japan, UK, and Spain has been slow[5]. This has been occurring due to various factors including rapidly aging population, declined economic activity, and declined economic efficiency in allocation of capital and workforce, among others[6]. Because of this, balance sheets of financial institutions in developed economies including the UK lack quality assets. In addition, the financial sector is less willing to reinforce the country’s real economy[7].
Being at the central point of the 2008 global financial crisis, the UK’s financial sector is still experiencing the consequences. The crisis triggered high employment rate in the UK’s financial sector[8]. Even after the crisis ended, it is expected that unemployment will continue in the financial sector, which reveals lack of sufficient stability to address any potential financial crisis.
- Research methodology
In order to garner relevant and sufficient data about the study topic, the study will employ both primary and secondary research. Primary research will be conducted through one-to-one interviews, telephone interviews, and postal questionnaires with bank managers. On the other hand, secondary research will be conducted by searching relevant materials using the internet.
- Data analysis & presentation
The collected data will be analyzed using quantitative techniques. This will help to develop concrete findings and conclusion on the subject matter. The data will be presented in form of tables and graphs to offer a precise view of the findings.
- Chapter/section headings
- Background information
- Nature of (and rationale for) final report
- Aims and objectives
- Statement of aim
- Objectives
- Initial review of literature
- Research methodology
- Data analysis and presentation
Bibliography
- Solomon, ‘Global Financial Crisis of 2008: Missing in Action’, Euromonitor International, 20 November 2014, Laeven and F. Valencia, Systemic Banking Crises, 2012,Learn Higher, ‘The financial crisis of 2007/2008 and its impact on the UK and other economies’, National and International Issues, n.d., pp. 1-5,
- Dullien, et al., The Financial and economic crisis of 2008-2009 and developing countries, New York and Geneva, United Nations, 2010,
- Escudero, ‘Effects of the crisis on the financial sector: Trends and policy issues’, Discussion Paper, 2009,
[1] L. Laeven and F. Valencia, Systemic Banking Crises, 2012, pp. 3.
[2] S. Dullien, et al., The Financial and economic crisis of 2008-2009 and developing countries, New York and Geneva, United Nations, 2010, pp. 1.
[3] Learn Higher, ‘The financial crisis of 2007/2008 and its impact on the UK and other economies’, National and International Issues, n.d., pp. 2.
[4] S. Dullien, et al., 2
[5] D. Solomon, ‘Global Financial Crisis of 2008: Missing in Action’, Euromonitor International, 20 November 2014
[6] D. Solomon, 2014
[7] S. Dullien, et al., 3
[8] V. Escudero, ‘Effects of the crisis on the financial sector: Trends and policy issues’, Discussion Paper, 2009, pp. 12.
