An analyst for the Bank of England and you have been asked to analyse Essay

An analyst for the Bank of England and you have been asked to analyse and critically evaluate the causes and consequences of the - Essay Example It is apparent that events in the previous years such as the dotcom crash, bankruptcies and frauds of large firms such as Enron and the sub prime crisis all lead to successive weakening of the financial markets. The money and capital markets showed extreme distress selling and in the crash, assets were depreciated to the extent of 300 trillion USD. Money supply and demand underwent some dynamic changes with banks reluctant to release funds to borrowers for fear of that the loans would not repaid. The UK government attempted to correct the problems by bring in a number of measures and methods. These included macroeconomic instruments and quantitative easing that was used for the first time in UK financial history. The market reacted in a diffident manner to these economic policies and some slight recovery is apparent in the GDP, inflation and other indicators. Table of Contents An analyst for the Bank of England and you have been asked to analyse and critically evaluate the causes and consequences of the world financial crisis of 2007/2008 in the UK 1 January 19, 2013 1 1. Introduction 5 2. Causes and consequences of the financial crisis 6 3. Response of capital and money markets 11 4. Response and effectiveness of the macroeconomic policies 16 5. Conclusions 26 References 28 List of Figures Figure 2.1. LIBOR-OIS Spreads (Kacperczyk and Schnabl, 2012) 7 Figure 2.2. Rise in risk premium (McKibbin and Stoeckel, 2009) 8 Figure 2.3. Euro Area Government Bond Rate (Kacperczyk and Schnabl, 2012) 10 Figure 2.4. The US housing bubble and crash (McKibbin and Stoeckel, 2009) 10 Figure 3.1. UK market index FTSE100 (Stockcube 2012) 11 Figure 3.2. Global financial assets value reduction (McKinsey, 2009) 12 Figure 3.3. Dispersion in Money Market Funds (Kacperczyk and Schnabl, 2012) 13 Figure 3.4. Asset holding and their spread (Kacperczyk and Schnabl, 2012) 14 Figure 3.5. M2 Multiplier and the ratio of M2 to reserves (Hodson and Mabbett, 2009) 16 Figure 4.1. GBP response to p olicies (Benford, et al, 2010) 17 Figure 4.2. UK Percent Change in GDP (Benford, et al 2010) 18 Figure 4.3. Central Banks Asset Holdings (Benford, et al 2010) 19 Figure 4.4. Transmission mechanism for purchase of assets (Benford, et al 2010) 20 Figure 4.5. Desired movement of the LM curve (Thomas, 2010) 21 Figure 4.6. Actual movement of the LM curve (Benford, et al 2010) 22 Figure 4.7. New equilibrium point in the IS-LM model (Athey, 2009) 23 Figure 4.8. Impact of QE on the economy (Joyce, et al, 2011) 24 Figure 4.9. UK Money Multiplier (Bank of England, 2010) 25 Figure 4.10. UK GDP growth (ONS, 2012) 25 Figure 4.11. UK CPI Inflation rate (Benford, et al, 2011) 26 1. Introduction The previous decade saw one of the worst and most widespread financial crisis in modern history when global financial markets crashed from 2007-2008. The financial loss across the world measured in terms of devaluation of assets, insolvencies of banks and asset depreciation is estimated at 290 trillion Doll ars (Barrel, 2011). According to a report by Rose and Spiegel (2009), the recession was fallout of the sub prime crisis that originated in 2005 and the market crash occurred in 2007. Mishkin (2008) is of the opinion that the years before 2007 that saw the dotcom boom and bust, the peak in crude oil prices and the high value of the stock market were signs that a crash was coming. Nothing was done to prevent the market

Tourism strategy Essay Example | Topics and Well Written Essays - 3500 words

Tourism strategy - Essay Example Services offered include travel shops, tour operators, and charter airlines. To complement the company's brand strength, Thomas Cook also owns a whole host of other renowned tour operator brands and airlines, including Thomas Cook Reisen, Neckermann, JMC, Condor, and Thomas Cook Airlines." (SAP customer success story, p.2). Corporate social responsibility is the motto of Thomas Cook Group. They provide support to the responsible tourism programs of the Travel Foundation by minimising the negative impacts arising from intensive tourism and maximising the benefits from the tourism to the local community. Through positively influencing the native society of the tourism destination, they contribute to the development of the industry itself. "Thomas Cook's mission is to "perfect the personal leisure experience." "In keeping with the values of Victorian society, Thomas Cook believed that by offering alternative, more virtuous and educational leisure activities, the lives of working people would be greatly improved and that everyone could become better educated through travel." (Steps towards a sustainable future). In order to achieve the operating profit target of $ 620 million in the period of 2009/ 2010, Thomas Cook differentiates their focusing from the main stream tour operating to independent travel and financial services. "Thomas Cook said it would increase targeted online sales to 35% in 2009/10 as part of its strategy of increasing controlled distribution." (Fearis 2007). Brief synopsis of the sustainable tourism strategy of Thomas Cook: Sustainable tourism is also referred as responsible tourism. It is based on the development of positive attitude towards the community and the environment of the destination to which the tourism is focused. Careful utilisation of valuable local resources for the benefit of the community and the protection of local environment is part of sustainable tourism. In this concept the following points are involved. 1. Admiring the local culture and environment of the destination. 2. Giving adequate economic returns to the people in the local community by buying their products and utilising their services. 3. Considering the savings of water and other natural resources in the environment. To co-operate with the energy saving programs initiated by local government is the main consideration required. 4. Contribution to protect the endangered wild life species in the destination. 5. Safeguarding the natural and cultural heritage of the tourism destination while tourists are in visit. 6. Self enjoyment and at the same time being responsible for one's own actions. 7. Caring and enhancing the attraction of the favourite destination through brilliant actions for the future generations of visitors. Sustainable tourism strategy adopted by Thomas Cook: Thomas Cook adopted sustainable tourism strategy. By holding the concept of social responsibility, they started the first holiday package. The sustainable tourism strategy of Thomas Cook is divided into six sections and for each of the section, detailed insight is provided for fulfilling the targeted goals. Thomas Cook is showing commitment to their sustainable tourism strategies. For the fulfilment of their objective they ensure the support and help from their clients. For helping to boost the local economy, local purchasing is