Fiscal and Financial Crises in the Euro Zone and the Measures for Improvement to Avoid the Occurrence of an Asia-type Crisis

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ABSTRACT

This research is an attempt to explore the fiscal and financial crisis in the Eurozone and measures for improvements in order to avoid the occurrence of an Asian-type crisis. The crises in the Eurozone were initiated due to the crisis in the United States. The basic impact of the crisis was to the exposure of the systems of national finance to the toxic assets in the United States, regardless of the situations of their balance of payments. For example, the crisis initially affects Germany, which reported a surplus in the current account in comparison to the other Eurozone economies that showed current account deficits but with lesser exposure to the assets of the United States. This research has adopted both primary and second methods of research. For the qualitative part of this research interviews have been conducted with individual from Canary Wharf. The secondary part of the research has been fulfilled by incorporating the literature from the past researches. The results of this research study have shown that financial crisis in the Eurozone economies have taken in to consideration the management of risk and has challenged most of the myths for instance the presumption that the governments have in a developed economy so that it does not default. For the insurers, this issue is beyond the default risks and the changes in the assets values on the financial statements. It also has an impact in the quantification of the liabilities and for the purpose of determining the solvency and the positions of economic capital.

ACKNOWLEDGEMENT

My thanks go out to all who have helped me complete this study and with whom this project may have not been possible. In particular, my gratitude goes out to friends, facilitator and family for extensive and helpful comments on early drafts. I am also deeply indebted to the authors who have shared my interest and preceded me. Their works provided me with a host of information to learn from and build upon, also served as examples to emulate.

DECLARATION

I, (), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, and this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views and not essentially which are associated with university.

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ABSTRACTii

ACKNOWLEDGEMENTiii

DECLARATIONiv

CHAPTER 01: INTRODUCTION1

1.1 Background of the Study1

1.2Aim and Objectives4

1.3Research Questions5

1.4 Layout of the Dissertation5

CHAPTER 02: LITERATURE REVIEW7

2.1 Introduction7

2.2 Financial Crises Comparison in the Globalisation Period7

2.3 Crisis in the Eurozone Economies and the Emerging Market Economies: Stylised facts8

2.4 Facts Specifically Related to the Crisis in the Eurozone Market Economies10

2.5 Macroeconomic Variables for the Countries in the Eurozone12

2.6 Early Warning Systems and the Financial Crisis of 2008-2009 and its Impact on the Eurozone market economies14

CHAPTER 03: RESEARCH METHODOLOGY20

3.1 Introduction20

3.2 Research Method21

3.3 Research Philosophy21

3.4 Overview of the Secondary Quantitative ...