Economic Crisis and Shareholder's Value
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This paper describes the economic global down-turn that started in the last quarter of 2007 and how it has affected the banking sector. To attract and retain shareholders, the author relates, institutions have increased shareholder's value through increased company innovation and customer care. Nonetheless, the paper concludes that the failed financial institutions, Northern Rock and Lehman Brother, were not able to create investor's drive and shareholders' value because of the company's participation in subprime mortgage lending that led to massive bankruptcies among investors.
From the Paper:"How is this related to shareholder's value and investor's drive? First of all investors usually invest in a company where they see they can earn reasonable return on their investments. However, due to reckless lending by banks and other financial institutions (DFIs), many potential investors in the banking sector became worried about their returns. They predicted that these lending by the banks are risky and hence they could lose a big deal of money if they invest in the banking sector. Hence, they decided not to invest in this sector."
Sample of Sources Used:
- New York Times, Articles written on May 27 2009 http://www.nytimes.com/2009/05/28/business/economy/28econ.html?_r=1&emc=eta
- Council on Foreign Relations: A Timeline of Global Economic Crisis http://www.cfr.org/publication/18709/
- International Socialist View Journal. The U.S economic crisis and its causes. Retrieved on 1 March 2010. http://www.isreview.org/issues/64/feat-moseley.shtml
- Daily Markets. U.S Financial Crisis. Retrieved on 1 March 1, 2010 http://www.dailymarkets.com/economy/2009/02/28/us-financial-crisis-46-states-could-face-bankruptcy-in-2010/
- Guardian. The American Economy and The Federal Reserve. Retrieved on 1 March 2010 http://www.guardian.co.uk/business/useconomy
Cite this Analytical Essay:
Economic Crisis and Shareholder's Value (2011, August 30) Retrieved November 12, 2019, from https://www.academon.com/analytical-essay/economic-crisis-and-shareholder-value-148084/
"Economic Crisis and Shareholder's Value" 30 August 2011. Web. 12 November. 2019. <https://www.academon.com/analytical-essay/economic-crisis-and-shareholder-value-148084/>