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Financial Crises
Name: Ahmed Al-Mohsen
ID: 200801561
Money and Banking
Section: 102
Instructors: Mohammad A. Magableh
Outline
1. Introduction
2. When and how the financial crises happen
3. The effect of financial crises on

Country

Company

People
4. Graph
5. The 2008 financial crisis
6. The Saudi economy and financial crisis
7. Conclusion
8. Reference
Introduction
Financial crises are major disruptions in financial markets that are characterized by sharp
declines in asset prices and the failures of many financial and nonfinancial firms. In this report
will talk about financial crises. When and how the financial crises happen? What are the effects
of financial crises on the country, company and people?
When and how the financial crises happen
The financial crises happen in 2007-2008. The financial crises start in the United States
when the banks start to give loans to the peoples how can’t repay the loan. There are loans
organizations that agree to give loan to person that have debt because he has property. They give
him the lone as security or guarantee for the loan. The demands for properties are declining
because there are fewer buyers. This make the price of property go down and force the loans
organization to ask for liquidity and compensation from the borrowers who don’t necessarily
have money. This effect the price in the market and financial transactions. The banks lose a lot of
their money and have lees liquidity will try to barrow the money from other banks but they will
not give them the money because they don’t how big the problem the other bank have so they
don’t give them the money. This will make a lot of banks have problem with the liquidity even if
they don’t have any problem. Because there are a lot of banks with liquidity problem will effect
the finical activity. The worker in the stock market always needs the liquidity so they don’t be
forced to sell some assets every time one of the investor asks for money he deserved. Because
the stock in the stock market is decreasing they sell them for liquidity or due to the situation in
the market.
The effect of financial crises
The financial crises have always have a negative effect. These effects are different in the
following:

Country
The effect of the financial crises in the country will stop the economic growth and
will lower the GDP.

Company
All the company loses a lot of money. Some of the company wants bankruptcy
and some of them try to recover from the impact of the financial crises.

People
The people how put their money in stock market lose all their money. There are
some people how lost their job if the company want bankruptcy.
Graph
The 2008 financial crisis
The world is passing through an unprecedented financial crisis. Global financial conditions
worsened to the point that the financial system almost ceased operating in early October.
Conditions have since improved, but not without massive wealth destruction, as banks have been
forced to write down hundreds of billions of dollars, huge financial institutions have gone
bankrupt or been bailed out by governments and stock markets have plunged.
The Saudi economy and financial crisis
No country in the world will be spared from the effects of the financial crisis and ensuing global
recession. For Saudi Arabia, it has completely shifted the focus of economic policy from
controlling inflation to restoring confidence in the financial sector. We see the following key
implications for the Saudi economy.

Oil prices will be significantly lower than previously anticipated and reduced production
will exacerbate the impact on oil revenues.

Finance for local and foreign companies doing business in the Kingdom will be less
easily available and more expensive.

Economic growth will slow as problems accessing suitably priced financing and lower oil
revenues hinder project implementation and hurt confidence.

Lower oil revenues will mean the end to the huge budget and current account surpluses of
recent years.

Sharply lower commodity prices and a strengthening of the riyal will cause inflation to
fall back rapidly over the next 12 months.
Conclusion
Financial crises are major disruptions in financial markets that are characterized by sharp
declines in asset prices and the failures of many financial and nonfinancial firms. The financial
crises happen in 2007-2008. The financial crises start in the United States when the banks start to
give loans to the peoples how can’t repay the loan. The worker in the stock market always needs
the liquidity so they don’t be forced to sell some assets every time one of the investor asks for
money he deserved. Because the stock in the stock market is decreasing they sell them for
liquidity or due to the situation in the market. The financial crises have always have a negative
effect. The effect of the financial crises in the country will stop the economic growth and will
lower the GDP. All the company loses a lot of money. Some of the company wants bankruptcy and
some of them try to recover from the impact of the financial crises. The people how put their money in
stock market lose all their money. There are some people how lost their job if the company want
bankruptcy.
Reference
http://arabic.cnn.com/2008/business/10/16/crisis.how/index.html
http://www.gulfbase.com/AR/GCC/Index/1
http://www.samba.com/GblDocs/Saudi_Arabia_Baseline_Forecast_2011-13_Eng.pdf
http://www.susris.com/articles/2008/ioi/081216-jadwa-bulletin.html