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crisis The financial crisis in 2008 Gocha Sharvashidze c r I s I s !
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crisis
The financial crisis in 2008
Gocha Sharvashidze
c r I s I s !
long period of rapid credit growth
low risk premiums
.
.
The crisis was preceded by…
abundant availability of liquidity strong leveraging
soaring asset prices and the development of bubbles in the real estate sector.
Facts in US bank sector
increasingly growing bank loans
Balance of payment
Interest rates in euro area
Crisis introduction
USthe bankruptcy of Lehman Brothers and fears of the insurance giant AIG (which was eventually bailed out) taking down major US and EU financial institutions in its wake.
Facts in US bank sector
increasingly growing bank loans
Balance of payment
Interest rates in euro area
Crisis introduction
This spread is known as the overnight index swap rate (OIS)
Bps- A basis point, or bp, is a common unit of measure for interest rates and other percentages in finance. 1% change = 100 basis points
Facts in US bank sector
increasingly growing bank loans
Estimated loses for US Banks
Interest rates in euro area
Crisis introduction
The write-downs of banks are estimated to be over 300 billion US dollars in the United Kingdom (over 10% of GDP) and in the range of over EUR 500 to 800 billion (up to 10% of GDP) in the euro area
Facts in US bank sector
increasingly growing bank loans Estimated loses for US Banks.
Interest rates in euro area
Crisis introduction
. The IMF estimates write-downs of USD 316 billion for banks in the United Kingdom and USD 1109 billion (EUR 834 billion) for the euro area.
Facts in US bank sector
increasingly growing bank loans Estimated loses for US Banks.
Interest rates in euro area
Crisis introduction
During the financial crisis 2008 interest rates had been changing rapidly
2007 2008 2009 2010 20140.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
4.454.81
1.621.35
0.48
6.32
8.32
9.46
8.40
2.53
Chart Title
Euro area (EA11-2000, EA12-2006, EA13-2007, EA15-2008, EA16-2010, EA17-2013, EA18-2014, EA19)BulgariaCzech RepublicDenmark
Facts in US bank sector
increasingly growing bank loans Estimated loses for US Banks.
Interest rates in euro area
Crisis introduction
One of the result of the crisis 2008 was negative balance of payment
Balance of payment 2008 2009 2010 2011 2012 2013
-50000
0
50000
100000
150000
200000
250000
0
-11,962
9,974 12,060
133,092
227,812
Extra-Euro area-18
Tourism statistic in 2008 world financial crisis Number of international
arrivals in Europe
Outbound tourism statistic
Total nights spent by residents
2007 2008 2009 2010 20140
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,244,223,242
1,139,650,072
1,042,535,645
1,289,114,366
European Union (20 countries)
1 2 3 4 50
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
tourism expenditure
United Kingdom Hungary France Spain Greece
Expenditure in tourism
Tourists expenditure
Inbound tourism
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