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Business 1st Edition by William Nickels ,James McHugh ,Susan McHugh
Edition 1ISBN: 978-0077597283Business 1st Edition by William Nickels ,James McHugh ,Susan McHugh
Edition 1ISBN: 978-0077597283 Exercise 2
The Banking Crisis Goes Global
The banking crisis has become a global phenomenon, even in countries that appeared to be doing well, such as China. Even though the Chinese government could force banks to make loans, it is reluctant to do so now that capitalism seems to be working. Because banks began holding on to their money, some 67,000 small businesses in China went into bankruptcy in the first half of 2008. Even some larger state-owned businesses felt the effects of the crisis.
Pakistan recently went to China to borrow funds but could not get them and turned to the International Monetary Fund (IMF) for help. Several Eastern and Central European countries and former Soviet republics are also in trouble. The IMF has agreed to lend Ukraine over $16 billion and Hungary over $15 billion. Turkey could need as much as $90 billion. Other countries such as Greece and Spain were in similar straits. Even oilrich Bahrain suffered from the crisis.
Should the IMF and World Bank continue to give funds to countries suffering financial crises? Where do those funds come from? Should the United States continue to help provide money for such loans as it has pledged to do?
The banking crisis has become a global phenomenon, even in countries that appeared to be doing well, such as China. Even though the Chinese government could force banks to make loans, it is reluctant to do so now that capitalism seems to be working. Because banks began holding on to their money, some 67,000 small businesses in China went into bankruptcy in the first half of 2008. Even some larger state-owned businesses felt the effects of the crisis.
Pakistan recently went to China to borrow funds but could not get them and turned to the International Monetary Fund (IMF) for help. Several Eastern and Central European countries and former Soviet republics are also in trouble. The IMF has agreed to lend Ukraine over $16 billion and Hungary over $15 billion. Turkey could need as much as $90 billion. Other countries such as Greece and Spain were in similar straits. Even oilrich Bahrain suffered from the crisis.
Should the IMF and World Bank continue to give funds to countries suffering financial crises? Where do those funds come from? Should the United States continue to help provide money for such loans as it has pledged to do?
Explanation
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The given case descries about banking cr...
Business 1st Edition by William Nickels ,James McHugh ,Susan McHugh
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