With economic sanctions and a plummeting price of oil, the Russian economy is seeing a real economic crisis. The value of the rouble is falling – causing inflation and a decline in living standards. Government tax revenues are falling as oil tax revenues decline. On top of a falling Rouble, the economy faces recession due …
Readers Question: “As for the argument that China can always use its foreign exchange (forex) reserves to provide further stimulus to prop up the economy, the people who purport this have little knowledge of basic economics. If China were to use substantial forex reserves in this way, it would become a large net-seller of U.S. …
Definition – A transaction cost is any cost involved in making an economic transaction. For example, when buying a good or buying foreign exchange, there will be some transaction costs (in addition to the price of the good.) The transaction cost could be financial, extra time or inconvenience. Transaction costs could involve. Paying a margin to …
Securitisation involves changing loans into tradeable bonds. Securitisation can increase the liquidity of banks and enable banks to engage in more lending than previously. Securitisation was a factor in the credit crunch because it enabled banks to lend more than usual. When there was a shortage of credit in the banking system, banks became over-exposed …
Policies to halt the slide of the dollar 1. Increase US interest rates · Higher interest rates will attract more hot money flows into the US and therefore cause an appreciation. · Also higher interest rates will cause an increase in savings and a fall in spending this will help reduce imports into the US …
The FTSE All-Share Index, originally known as the FTSE Actuaries All Share Index, is a stock market index which aims to capture 98% of the full value of the London Stock Exchange. This means it is an accurate reflection of the overall stock market. The index is a capitalisation-weighted index. This means that companies are …
Italy has struggled to reduce national debt as a % of GDP since government debt has risen to over 100% of GDP in the late 1980s National Debt Italy Italy has the second highest public sector debt in Europe, after Greece. The IMF predict public sector debt of 123.4 % of GDP in 2012. By …
Readers Question:Do you really think the UK will keep the AAA credit rating for say the next 2 years? The UK is one of the few countries to have a AAA credit rating. (list of countries with highest credit rating) I’ve always felt that the UK should be able to maintain its AAA credit rating …