Finance crisis Essay Example | Topics and Well Written Essays - 2000 words - 1

Finance crisis - Essay Example ing to Keynes (1936) the smooth flowing world economy was destabilized during the late 2000s and such a scenario was seen in Iceland for the very first time and even in the world. Krugman (2008) explains economic crisis is one the retarding factors that have pulled down the steep growth of the world economy including the subsequent growth of the smaller economies which have gained a new impetus in the growth of their economies. Kothari (2010) defines economic crisis as a collection of varied circumstances that results in the huge loss of the nominal value of their financial assets. He further explains that an organisation or a company has a number of stakeholders who are directly or indirectly related to the organisation or company through a financial relation. An economic crisis turns a company into a dried well of financial resources and a result the stakeholders of the company even suffers through immense lack of financial resources. According to the observations of Kothari (2010) the economic crisis faced by the entire world has turned a disturbingly huge number of people jobless and thus penniless. People all over the world lost their jobs while others bargained for the job in exchange of one of the most meager sum of money. As more and more people turned jobless the chaos and panic regarding being jobless seemed to engulf them over a long time. He further elucidated the different kinds of economic crisis. Firstly it is the banking crisis where the depositors of the respective banks immediately ask for returning their deposited money. The bank faces a crisis over the availability of the funds within a stipulated time period. The second form of economic crises is the stock market crash which clearly suggests that it refers to the drastic decrease of stock prices over the larger section of the stock market that hugely depreciates the amount or value of the stocks resulting in excessive loss for the investors. The third form of economic crisis comes in the form