Banking Crisis



Banking Crisis

Introduction

One of the most difficult and worst situations that are faced by the banking sector and that affects the overall functioning of the industry is a banking crisis. There are different types of banking crises that have affected the banking industry in the past. The banking crisis may be bank runs, in which the effect of the crisis is faced only by a single bank. The crisis in this type affects only the functioning of a single bank and does not affect the functioning and the matters of the other banks. Then there are banking panics. Banking panics are the crises that affect many banks simultaneously. This crisis is not limited to a single bank but it takes many banks into its affect and causes severe problems for many banks at the same time. The third type of banking crisis that the banking sector faces is the systematic banking crisis. This is the biggest crisis that the industry faces. This crisis is faced by the country as a whole and the number of defaults that the financial companies make is also great. It becomes difficult for the companies to pay back their contracts and hence push the system of banking into great difficulty.

Bank runs are the outcomes of the banking crisis that put an end to the financial institutions of the country and the demise of the financial and banking sector of the country is the result of such a situation. This research proposal will look into the banking crisis and the many regulations that ca n be made so that such banking crises can be avoided in the future. The rules and legislations to prevent a lot of damage to the banking sector, as well as, the financial institutions will also be researched and made a part of the study. The international approaches that the international players in the banking industry have will also be analyzed to understand that how can these crises be avoided and what can be done to prevent these crises to cause a lot of damage to the banking industry and the international financial stability.

Problem Statement

There are a number of crisis in the banking sector that have influenced the entire banking industry and has also crippled it many times in the past. It is the need of the hour to make sure that the international policy makers of the banking industry make such rules, regulations and legislations help the banking industry avoid such crises in the future. It is also the need of the hour that the international policy makers make such policies that the international financial stability of the world is not at stake of any one nation or any one part of the world. The international financial stability needs to be maintained and preserved at any cost.

Research Questions/Hypotheses

There is no specific hypothesis or a research question in this research. The researchers will address the overall context of the topic that they have chosen for the ...