International Business Essay Example | Topics and Well Written Essays - 1500 words - 7

International Business - Essay Exampleote that the financial markets do not often work best when they are left alone and as such there shall be almost intervention by the government in the form of regulations. This argument becomes more pertinent in the perk up of current financial crisis which many believe is a direct result of a de-regulated and highly freelancer financial system. The globalization of finance therefore is something which is now considered as something which may not be alone good for the national and international economies.There can be many reasons that have culminated into the present crisis and as such governments tackled this issue more swiftly. However, question still remains as to why such episodes of positive crisis happened despite the fact that financial system was considered as safe and sound before the emergence of the crisis. just about apparent reason for the financial crisis was labeled as the sub-prime mortgage crisis which resulted into defaul ts by the sub-prime borrowers on their mortgage obligations with the financial institutions. The act of securitization further added the fuel to this whole drama because most of the financial institutions, through their special objective vehicles, securitized their mortgage portfolios and tied the cash flows received from their subprime mortgage portfolio with that of the securitized securities. This mismatching of the cash flows therefore resulted into the credit crunch and addition of credit to private sector therefore was reduced causing the credit crunch and started the chain reaction for the current financial crisis.What is also significant to understand that the craze of securitization increased a lot as many countries started to use this dish out in potentially more speculative dimensions? The spreading of the securitization however, made this process more complicated and as such very few had the capability to understand as to how the process of securitization is interco nnected with each other across the markets and what can