PREFACE
IN THE FORMATION OF THIS REPORT EFFORTS
HAD BEEN MADE TO COVER EVERY ASPECT OF
THE RECESSION BUT DUE TO THE TIME
CONSTRAINT SOME OF THE TOPICS HAD NOT
BEEN COVERED IN ITS FULL EXTENT SUCH AS
HOW RECESSION SPREAD FROM U.S. TO
ACROSS THE WORLD, AND WHAT ARE THE
IMMEDIATE MEASURES TAKEN BY THE INDIAN
GOVT TO PROTECT INDIAN MARKET, AND
WHAT ARE THE CAUSES OF GREAT
DEPRESSION OF 1926 AND HOW U.S. CAME
OUT OF IT. HOWEVER EVERY EFFORT HAS
BEEN MADE TO EXPLAIN THE PRESENT
ECONOMIC CRISIS AND FAILURE OF LEADING
BANKS OF THE WORLD AND THE BAILOUT
PLAN ADOPTED BY THE WEST TO KEEP
RECESSION UNDER ARREST SO AS TO
PREVENT IT FROM BECOMING A DEPRESSION
AND AT LAST BUT NOT THE LEAST THE
IMPACT OF RECESSION ON INDIA.
INDEX
1.Why banks prefer low rates.
2.How low rates lead to recession.
3.Spread of Crisis
4.Measures taken by U.S.
5.Measures taken by other economies.
6.Impact on India
7.Conclusion
ABSTRACT -
Prior to crisis the financial market in U.S. and
other major economies of the world had been
growing at a rapid rate. Investors of all types
that is both the small savings of household and
large corporate savings have been able to
mobilize their savings and earned a lot
investing through capital market. Various type
of
sectoral
funding agencies had been
operating to facilitate those movements and
help the borrowers in getting their
requirement financed.
However, with the advent of subprime
crisis that generally refers to situation that
resulted from the borrowing defaults on
subprime lenders. This type of lending was
advanced mostly by the mortgage funding
agencies. However as long as situation in both
the market i.e. capital market and property
market remained tacit the things were okay.
With time the house prices initially rising and
than falling these agencies started making
huge losses on account of defaulting lo