What was the response of the Indian regulations to the global financial crisis? (2024)

What was the response of the Indian regulations to the global financial crisis?

To counter the negative fallout of the global slowdown on the Indian economy, the federal Government responded by providing three focused fiscal stimulus packages in the form of tax relief to boost demand and increased expenditure on public projects to create employment and public assets.

What was the response to the global financial crisis?

In response to the crisis, regulators strengthened their oversight of banks and other financial institutions. Among many new global regulations, banks must now assess more closely the risk of the loans they are providing and use more resilient funding sources.

What were some regulatory responses to the financial crisis?

The Dodd-Frank Wall Street Reform and Consumer Protection Act and the Emergency Economic Stabilization Act (EESA) which created the Troubled Asset Relief Program (TARP) helped to quell the financial crisis of 2008. The creation of the CFPB and FSOC helps to monitor financial institutions and protect consumers.

What is the response of India to the global economic crisis of 2008?

In line with efforts taken by governments and central banks all over the world, the Government and the Reserve Bank of India took aggressive countercyclical measures, sharply relaxing monetary policy and introducing a fiscal stimulus to boost domestic demand.

What are the policy measures of recovery out of global financial crisis in India?

These include deregulation of interest rates, reduction of cash reserve ratio (CRR), liberal entry of foreign banks, broad-based ownership base in domestic banks, inclusion of various microprudential measures, strengthening the processes of regulation and supervision, constitution of the Board for Financial Supervision ...

Who was blamed for the global financial crisis?

The Biggest Culprit: The Lenders

Most of the blame is on the mortgage originators or the lenders. That's because they were responsible for creating these problems. After all, the lenders were the ones who advanced loans to people with poor credit and a high risk of default.

How did China respond to the 2008 global financial crisis?

The central government announced a 4-trillion-yuan plan to bolster the slowing economy through construction of key infrastructure (38 percent), recovery of earthquake-impacted areas (25 percent), subsidized housing (10 percent), and rural infrastructure (9 percent), investments in innovation and economic restructuring ...

What was the regulatory response to the Great Recession?

The Dodd-Frank Act provides stronger oversight of numerous consumer and financial markets. Though some may argue that certain parts of its regulations are too restrictive, many agree that it was a necessary response to the 2008 crisis, helping to prevent another market meltdown in the future.

What regulations caused the 2008 financial crisis?

The Bottom Line

Deregulation in the financial industry was the primary cause of the 2008 financial crash. It allowed speculation on derivatives backed by cheap, wantonly-issued mortgages, available to even those with questionable creditworthiness.

How did the government intervene in the 2008 financial crisis?

The biggest bailout for the banking industry was the government's Troubled Asset Relief Program (TARP), a $700 billion government bailout meant to keep troubled banks and other financial institutions afloat. The program ended up supporting at least 700 banks during the 2007–08 Financial Crisis.

What was the impact of global financial crisis of 2007 08 on India?

India did not suffer much on account of the financial crisis. Absence of full capital account convertibility, a strict check on short-term foreign borrowings and its relative disconnect with the foreign banks insulated it from the devastation that was faced by the global financial system at that time.

What was the cause of the financial crisis in India?

One of the main causes of the crisis was the accumulation of foreign debt. In the 1980s, India had borrowed heavily from international lenders, in part to finance infrastructure projects and industrialization.

What was the reason that the 2008 US crisis does not impact India more?

First, India's banking sector was not as exposed to the toxic assets that caused the crisis in the first place. Additionally, India's conservative banking regulations and limited integration with the global financial system helped insulate it from the worst effects of the crisis.

Is India immune to global recession?

So, net-net India is better off than most other markets, but India is not immune to global recession fears and Middle East tensions creating any spike in oil prices.

What is India's current monetary policy?

The present RBI rates 2023 are 6.50%, 3.35%, and 6.75% for repo rate, reverse repo rate, and Marginal Standing Facility Rate, respectively. What is the latest monetary policy rate? The latest monetary policy rate is 6.50% which has been raised from 6.25% in February 2023.

Who solved the 2008 financial crisis?

The federal government had to step in with emergency capital to avoid a global financial meltdown, subsequently bailing out other companies, such as the insurance company AIG, and arranging for Bank of America to purchase investment banker Merrill Lynch for $50 billion in stock.

Who benefited from the 2008 financial crisis?

John Paulson

Paulson's 2009 overall hedge fund returns were decent, but he posted huge gains in the big banks in which he invested. The fame he earned during the credit crisis also helped bring in billions in additional assets and lucrative investment management fees for both him and his firm.

What was the worst financial crisis in global history?

The Great Depression of 1929–39

This was the worst financial and economic disaster of the 20th century. Many believe that the Great Depression was triggered by the Wall Street crash of 1929 and later exacerbated by the poor policy decisions of the U.S. government.

Why China was not affected by 2008 financial crisis?

China was not well integrated into the global financial system, so there was not much effect through financial channels. But as the impact of the crisis was felt in the United States and Europe, China was hit with a big shock through its trade sector.

What was the aftermath of the global financial crisis in 2008?

The Aftermath of the Global Financial Crisis of 2008-2009

Many who took out subprime mortgages eventually defaulted. When they could not pay, financial institutions took major hits. The government, however, stepped in to bail out banks. The housing market was deeply impacted by the crisis.

Did China save the 2008 financial crisis?

China's huge stimulus after the 2008/09 financial crisis helped the global economy recover, partly due to the Asian country's insatiable appetite for imported raw materials for infrastructure projects.

What regulatory changes were made in the USA in response to the 2008 global financial crisis?

In the hope of preventing another such financial meltdown, the Democrat-led Congress passed Dodd-Frank in July 2010, largely along party lines. Its major provisions included the so-called Volcker Rule, Fed-mandated stress tests, and the empowerment of the FDIC to seize “too big to fail” firms.

What was the Fed's response to the financial crisis of 2007 and 2008?

The Federal Reserve responded aggressively to the financial crisis that emerged in the summer of 2007, including the implementation of a number of programs designed to support the liquidity of financial institutions and foster improved conditions in financial markets.

How could government regulations have prevented or mitigated the credit crisis of 2008?

Regulators could instead have better acknowledged and countered the inherent incentives of leveraged financial institutions to take on excessive risks without internalizing systemic risk, through more effective use of available supervisory tools and stronger enforcement.

Was the financial crisis of 2008 a failure of regulation?

It found widespread failures in financial regulation; dramatic breakdowns in corporate governance; excessive borrowing and risk-taking by households and Wall-Street; policy makers who were ill prepared for the crisis; and systemic breaches in accountability and ethics at all levels.”