Europe and the financial crisis Flashcards
(33 cards)
How many members of the EU were there in 2015?
28, 19 of which used the Euro
To what is the Eurozone conferred to?
to the 19 countries that use the Euro
What is it with the danish currency?
It is pegged to the Euro
What happened in Europe after the World Crisis?
The Eurozoine crisis
What happened to the unemployment rate in Europe, especially of the youth
from around 19 % in 2004 to 23 % in 2014. 9 to 11 for the overall
What happened after the World Crisis in the United States compared to Europe?
Th US recover much faster
Describe the interconnection of the three crises
Which type of crisis did the US not have?
A sovereign debt crisis.
Where the root causes in Europe the same as in the United States?
Yes, they were
When did BNP Paribas announce that they do not know what is in their portfolio?
August 9. 2007
When did Northern Rock go bancrupt?
September 14, 2007
When was the UK bank rescue package announced?
October 8, 2008
Did the European countrires aid their banks a lot?
Yes, absolutely
What was the problem with provaiding aid?
That many counries did not have the capacity to provide such aid.
What happened to loans in Ireland in 2007?
They increased much faster than GDP, the rest if the EUro Area was also experiencing a boom in lending
What tends to move hand in hand with much lending?
a housing boom
Did a housing boom happen in Ireland?
Yes, absolutely.
What can you compare Ireland to?
Because as it ran out of local deposits, it was forced to go elsewhere to the wholesale lending market in order to fuel all of the lending that it was doing. Ireland is like northern rock writ large.
How much lending needed to be funded from abroad?
This gap is 26 billion euros at the beginning of the period and rises to 129 billion euros by the end. A hundred billion of euros needs to be found from abroad for a country, remember at this time, has a total GDP of about 180 billion euros.
How did the Irish government react?
On September 30th, 2008, the Irish government made the most powerful response of any nation during the global financial crisis. Guaranteeing all liabilities for seven covered banks for a total of 375 billion or about two times Irish GDP.
What happened to Ireland?
That 375 billion dollars or more than 375 billion Euros, or more than 200% of GDP of Ireland, was just too big of a burden for that government to bear. Ultimately, Ireland required an international bailout in November of 2010. We will discuss much more about this in the next module.
By how many banks was Iceland dominated at the time?
By three major banks:Glitinir, Landsbanki and Kaupthing
How much was lending compared to GDP?
2 x in 2003 and 10x in 2008
By what was Icelands lending boom filled?
By outside funding
