ENGLISH FOR FINANCE AND ACCOUTING UNIT 4 ACCOUTING FOR BANKS

CAN THO UNIVERSITY COLLEGE OF ECONOMICS ♣♣♣♣♣♣♣♣♣♣♣ ENGLISH FOR FINANCE AND ACCOUTING UNIT ACCOUTING FOR BANKS Instructor: M.A Pham Lan Anh Can Tho, April 2018 NAMES ORDER NUMBERS CHARACTER Huỳnh Hoàng Mỹ Uyên ALICE/MC3 Huỳnh Ngọc Ánh LAURA/Economist Nguyễn Ngọc Cẩm LOUISA/MC2 Nguyễn Thị Kiều Nhung 11 STELA/Economist Huỳnh Thị Tuyết Oanh 12 AMANDA/people Trần Thu Thảo 42 SELENA/MC1 NOTES MC1: Welcome to the economic talk show Today's theme is "10 years from the US financial crisis in general and the US banking system in particular" Today we have two guests, Mrs Claura and Mrs Stela, to discuss and analyze the topic today -MC2: It has been 10 years since the financial crisis of the United States between 2007 and the end of 2008 As we all know, the financial crisis of 2007 in the United States has led to has led to many bad consequences for the banking system in the US and other major financial institutions around the world The financial crash culminated in October 2008 when even the giant and long-standing banks that had survived past financial and economic crises, such as Lehman Brothers, Morgan Stanley, Citigroup, AIG, also crash Credit crunch appears to make the real economy of the United States difficult MC3: According to the evidence and the data collected In the first quarter of 2008, US GDP grew by 0.9%, then rose sharply to 2.8% in the second quarter economic difficulties and widespread financial crisis, US GDP grew by 0.5% in the third quarter of 2008 With negative growth in the third quarter and the fourth quarter of 2008, the US economy has officially fallen into recession and this is also the first time GDP of this country has negative growth in two consecutive quarters since the decline in the fourth quarter 1990 and the first quarter of 1991 In the period from 2005 to 2008, the US economy went against the previous period, meaning that GDP declined year by year and reached a "bottom" of 1.1% in 2008 In Asia, markets have fallen sharply from 40.7% to 65.9% - along with the trillions of dollars evaporated from the market South Korea's KOSPI had the lowest drop (-40.7%), while the VN Index of Vietnam, Shanghai Composite Index of China fell the most with a decrease of more than 65% of the value with the markets included in the comparison Japan's Nikkei 225 dropped 42.1% - the sharpest drop since 1990 (-39%) MC1: Recognizing the past crisis Sir, can you let us know at what time the US government has come up with recovery solutions, relief packages to help debug the banking system at that time? -STELA: When the banking crisis broke out, the US government introduced supportive policies through open market operations, the open-market lending program, and the government's rescue package great -In the United States, two agencies were formed to buy real estate loans from banks and refinance banks Freddie Mac and Fannie Mae Banks in the United States also mobilized mainly short-term money After the real estate loan, the banks can repack and transfer to the two organizations to be refinanced or sold to them These two institutions are involved in the bond market for a very long time, dealing in such debts, collecting money and using that money to refinance commercial banks -STELA: the government enacted a program called TARP the troubled assets relief program, and which the rest of us Call the bank bailout, this initially earmarked $700 billion to shore up the banks it actually ended up spending $250 billion bailing out the banks in combination with lending by the FED, this help stop the cascade of panic in the financial system The treasury also conducted stress tests on the largest Wall Street banks this eliminated some of the uncertainties that had paralyzed lending among Insituions -MC2: It has been years since the crisis According to Mr B, what you think of the recovery process of the US banking system after the bailout programs of the above-mentioned government bank? -LAURA: In the US, five years after the financial crisis, the world's number one economy has not fully recovered According to AP, this is the slowest recovery since the Great Depression of the 1930s In 2009 alone, 140 US banks were wiped out, GDP growth also negative 2.8% The fight to raise public debt ceiling in 2011 also made the United States for the first time lowered the credit rating However, until recently, the US economy has some signs of optimism The country grew 2.8% last year, higher than the pre-crisis period of 2006 (2.7%) Corporate and investment confidence in the second quarter of 2013 has improved The housing market is warming, and the stock is also set a record for several months ahead of optimistic data from the economy The US budget in June was the highest in five years and the unemployment rate also dropped significantly from nearly 10% at the end of 2010 -MC2: To cite the current situation of the bank system objectively we have had some random interviews from the people who are present at those banks to see if they are aware What since the economic crisis -AMANDA: I feel that since the economic crisis of 2007, the government has introduced many economic improvement policies Life as well as economic has gradually recovered to much today At the moment, we feel much more secure in the previous stage We not worry much about economic issues Moreover, I see that banks now have many policies for us to choose, I am completely secure when sending money to banks About interest rates, really attractive Economic stability and development today It is also an opportunity for both me and the bank However, i think even though the economy is much more stable, there are still some potential risks Therefore, some bad cases in the bank are broken Bankers can not afford to pay principal as well as interest to customers And with the bankruptcy of some banks time ago I was afraid That's why I not dare send a huge amount of money into the same line I think I have to split the money and send it to different banks to minimize the risk -MC2: From the negative implications that the financial crisis has caused, what you think is the main cause of the crisis? -LAURA: Well, one key factor that led to the 2008 financial crisis was perverse incentives the government failed to regulate and supervise the financial system but the thing To remember about this massive systemic failure is that it happened in a system made of humans with human failing some didn't understand what was happening, Some willfully ignored the problems and some were simply unethical motivated by the massive amounts of money involved -MC1: It has also been 10 years since the crisis and the banking system is now on track to progress from the lessons learned after the crisis true that A pretty expensive lesson for smart investing -MC 2: Thank you for watching and listening to CNN's economic talk show See you on the next talk show ... program, and the government's rescue package great -In the United States, two agencies were formed to buy real estate loans from banks and refinance banks Freddie Mac and Fannie Mae Banks in the United... The financial crash culminated in October 2008 when even the giant and long-standing banks that had survived past financial and economic crises, such as Lehman Brothers, Morgan Stanley, Citigroup,... have two guests, Mrs Claura and Mrs Stela, to discuss and analyze the topic today -MC2: It has been 10 years since the financial crisis of the United States between 2007 and the end of 2008 As we