Building Strategies for The Banking Sector During the Economic Crisis

The financial crisis from 2007 to the present is a crisis caused by a lack of liquidity in the
banking system. It caused the collapse of large financial institutions, the rescue of banks by
national governments, and the collapse of stock markets around the world. The crisis unfolded
quickly and turned into a global economic shock, which led to a series of European bank
failures, drops in various stock market indices and a sharp drop in the market value of stocks
and commodities. This research assesses the root causes of the global financial crisis. Near
financial research shows that statistical models focused on optimistic expectations contributed
to significant mispricing problems in the huge unregulated credit default swaps market that
erupted in following currency and banking crisis. This research focuses on the global
financial crises, and how we can prevent such crisis in the future by enhancing the regulatory
framework and decreasing the risk by recapitalization and emerging banks markets.