The Subprime Crisis Essay Example | Topics and Well Written Essays - 500 words

The Subprime Crisis - Essay ExampleStarting in February with the biggest patois in Europe HSBC reporting a loss of $880 million through its US subprime unit Decision One Mortgage, the list extends to US subprime lender New Century Financial Corp, Citigroup, Wachovia Corp, Merrill Lynch, and Countrywide in the U.S., the German Banks IKB and the state bank Sachsen L B, the French bank BNP Paribas, the Dutch Bank NIBC, the British mortgage lender Northern Rock, and the largest Japanese bank Mitsubishi UFH Financial Group, INC. The strong Swiss Banking sector was also hit through Credit Suisse and UBS (FACT BOX Subprime crisis affects banks worldwide).The breaching of the certain string defenses of the Swiss Financial sector, by the subprime market crisis, causing a downswing in 2007 in the fortunes of what could otherwise be considered as a successful year for the Swiss parsimoniousness, is an indicator that the Swiss economy will not be spared from the worldwide impact of the subpri me market crisis in 2008. However, the Swiss economy can be judge to weather the storm of the subprime market crisis and restrict the consequences. (Allen, 2008). The reasons for this optimism stems from the strengthening of the Swiss franc in the tierce quarter of 2007, against the U.S. dollar by as much as 6.7 percent. In addition the forecast for the gross domestic product growth of 2.5 percent for 2007 is suggestive that the Swiss economy continues to remain robust. This was the result of the reaction of the Swiss subject Bank to immediately inject liquidity, when a liquidity pinch was felt in August 2007 as a result of the subprime market crisis (Swiss Franc Outlook Will Weakness Continue). These moves of the Swiss National Bank axiom the watch making and luxury goods manufacturing sectors performing well supported by the pharmaceutical and food product. some other factor weighing in is the domestic consumer strength of Switzerland. The Swiss economy can be expected to gr ow in 2008, but at slower rate due to the impact of the subprime market