Business

Business

Name:

School:

Course/Number:

July 25, 2011

Instructors Name:

Business

Financial derivates is viewed as trading agreements whose worth is determined by other monetary assets associated with a particular derivative. The subprime mortgage catastrophe is a good illustration of such an association. Indemnity organizations and multinational corporations employ financial derivatives in their monetary portfolios in a bid to enhance the earning component on equity. Kregel (2008) offers a succinct appraisal of Minsky’s premises directed towards the subprime mortgage occurrence with regard to its impact on financial derivatives. The given research offers an identification of the current gaps that the discussion may seek to review within the study topic with the initial identified as the association between subprime mortgage and assets held by indemnity associations as noted within the advent of the twenty-first century (Cox, 2009). Secondly, the study will determine the nature of utilization patterns noted within investment procedures and bail out monetary approaches within the lat three financial periods.

Thirdly, the study will analyze the strength of adopted modifications in indemnity institutions with regard to strategy approaches to avert a similar impact as that noted with the subprime mortgage catastrophe. Fourthly, following the Dodd-Frank Act the investigation should outline the substitute approaches that should be employed by financial institutions for improved stability (Beddoes, 2010). The research topic should incorporate more graphs and other comparative tools to ensure that a comprehensive analysis is obtained within the various identified gaps. Additionally, the graphs should also cover recent periods for a higher precision within the analysis. For instance, the graph reflecting growth patterns within the financial derivatives trade covers the periods 1987 to 1993 and thereby not reflecting the present situation, from the periods 1994 to the present. The current view must therefore be reflected within the study if the identified gaps are to be addressed within a credible manner.

Annotated Bibliography

Beddoes, Z. (2010). Creating financial harmony: What role for government versus the market? Cato Journal 30(2), 259-264.

The article addresses the premise of financial harmony by reviewing whether the given state comprises of innovation, constancy, crisis deficiency, or efficacy within the allocation of monetary credit, within commercial practices.

Bicksler, J. (2008). The subprime mortgage debacle and its linkages to corporate governance. International Journal of Disclosure and Governance, 5(4), 295-300.

The periodical appraises the accuracy of the assertions that the subprime mortgage catastrophe stemmed from misappropriated monetary motivations and inadequate information within the indemnity market.

Chen, Y. (2006). An empirical study of using derivatives on multinational corporation strategies in Taiwan. The Journal of American Academy of Business, 10(1), 110-116.

The author reviews the derivatives in Taiwan as compared to the ideal requirements of such monetary markets. This leads to the identification of the limitations and strong links and the solutions to the constraints.

Cox, L., Epermanis, K., McShane, M. & Wells, B. (2009). Risky asset substitution in the insurance industry: An historical example. Journal of Insurance Regulation, 27(3), 67-90.

The publication assesses the possible risks attached to asset substitution as noted from the 1980s periods as retaliation to the monetary depression noted within the duration and how the same affects the present markets.

Kregel, J. (2008). Using Minsky’s cushions of safety to analyze the crisis in the U.S. subprime mortgage market. International Journal of Political Economy, 37(1), 3-23.

Kregel employs Minsky’s premise with regard to the cyclic pattern of monetary markets under capitalistic economies as characterized by intrinsic volatility aspects within the markets that lead to subsequent augmented leverage levels.

McClintock, B. (1996). International financial instability and the financial derivatives market. Journal of Economic Issues, 30(1), 13-33.

The publication addresses the positive modifications infused within the derivative markets in the period 1980s that led to an extension of the sector by eight trillion and the influences that the growth has relayed to the present global markets.

Roman, A. (2008). Changes in banking activity in the context of the development of financial derivatives markets. Annals of the University Of Oradea, Economic Science Series, 17(3), 826-830.

The author offers an in-depth investigation on banking practices as key players in the financial derivative market and their influences in the given industry with regard to the present monetary catastrophe and past crises.

Seabrooke, L. (2010). Responding to the global crisis: The politics of financial reform. British Journal of Politics & International Relations, 12(2), 313-323.

Seabrooke offers the viewpoints that monetary catastrophes in financial derivatives markets are attributed to deficiencies in monetary bylaws and the surplus of monetary innovations that necessitate accountability systems to overcome the constraints.

Senate Committee on Banking, Housing, and Urban Affairs, Chairman Chriss Dodd (D-CT), (2011). Retrieved from http://banking.senate.gov/public/_files/FinancialReformSummary231510FINAL.pdf

The articles addresses the various strategies adopted by the US within an incorporated bill implemented on the financial markets in a bid to relieve the subprime mortgage impacts as well as prevent any other form of similar crisis within the nation.

Stout, L. (2009). Regulate OTC derivatives by deregulating them. Regulation, 32(3), 30-33.

Stout suggests that a significant part of the subprime mortgage issue was based on over-the-counter transactions that enhanced the speculative practices and thereby the problem upon the bubble. Implementing deterrent approaches towards the same will act as a future prevention element.

 

 

 

 

 

 

 

 

 

 

 

References

Beddoes, Z. (2010). Creating financial harmony: What role for government versus the market? Cato Journal 30(2), 259-264.

Bicksler, J. (2008). The subprime mortgage debacle and its linkages to corporate governance. International Journal of Disclosure and Governance, 5(4), 295-300.

Chen, Y. (2006). An empirical study of using derivatives on multinational corporation strategies in Taiwan. The Journal of American Academy of Business, 10(1), 110-116.

Cox, L., Epermanis, K., McShane, M. & Wells, B. (2009). Risky asset substitution in the insurance industry: An historical example. Journal of Insurance Regulation, 27(3), 67-90.

Kregel, J. (2008). Using Minsky’s cushions of safety to analyze the crisis in the U.S. subprime mortgage market. International Journal of Political Economy, 37(1), 3-23.

McClintock, B. (1996). International financial instability and the financial derivatives market. Journal of Economic Issues, 30(1), 13-33.

Roman, A. (2008). Changes in banking activity in the context of the development of financial derivatives markets. Annals of the University Of Oradea, Economic Science Series, 17(3), 826-830.

Seabrooke, L. (2010). Responding to the global crisis: The politics of financial reform. British Journal of Politics & International Relations, 12(2), 313-323.

Senate Committee on Banking, Housing, and Urban Affairs, Chairman Chriss Dodd (D-CT), (2011). Retrieved from http://banking.senate.gov/public/_files/FinancialReformSummary231510FINAL.pdf

Stout, L. (2009). Regulate OTC derivatives by deregulating them. Regulation, 32(3), 30-33.