The Financial Crisis Of The United Kingdom And The World

INTRODUCTION Nationwide Building Society is a mutual financial institution dealing with mortgage loans, investments, retail banking, current accounts, loans, house insurance, travel insurance and credit cards. It is the largest building society in the United Kingdom and the world. It falls under the banking and financial services sector. The great recession of 2008 hit the banking and financial services sector hard as the recession led to the financial crisis of 2007-2009. This period was also named as the credit crisis. The major cause of this crisis is the housing loans and the subprime mortgage crisis. As nationwide building society deals with a lot of mortgage loans it was very much affected by the great recession. But the way the†¦show more content†¦2. A temporary 2.5% reduction in Value Added Tax. 3. $ 3 billion investment spending brought forward from 2010. 4. $ 20 billion small enterprise loan guarantee scheme. The government also looked to increase government spending by increasing the public sector expenditure substantially in hope that it would shift the demand curve to its right. This was majorly done to stabilize the banking sector and the unemployment rate. The UK’s ability to take extraordinary action in fiscal measures is limited and its because of the burden it was bearing from a lot of major bank bail outs. This in turn affected public finance. Due to all this there was a substantial rise in deficit to an estimated 175 million pounds which is 12.4% of the GDP and a rise in the national debt above 80% of GDP at its peak. As they looked to stabilize the markets the government was facing a huge deficit and was spending more that what it was earning. Therefore, in 2010, the new government looked to cut down government spending and aggregate demand correspondingly. They looked to cut it down by 6 billion pounds. This had the risk of slowing down the economy but was optimistic. They had to go about this by increasing the tax rates for the rich. MONETRAY POLICY Monetary policy is usually framed by the Monetary Policy Committee in the UK. They have the authority to set the base interest rates but have to make sure that they are in accordance with the inflation rate set by the government. UK targets anShow MoreRelatedCountry Economic Analysis Report Essay1563 Words   |  7 PagesCountry Economic Analysis Report Throughout the years, the United States of America has endured a very strong economy. Although there have been many obstacles of hindrance such as trade deficits, wars, hostile governments and embargo’s, the economic status of the United States still continues to prevail. Just to name a few, the economy of this country survives on simple commodities such as pork, oranges, precious metals and the productive efforts of its citizens. In this paper, I will not onlyRead MoreCorporate Governance General Review1775 Words   |  7 Pageswhich cannot be ignored. 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