The Global Financial Crisis was caused by expanded lending to subprime borrowers in the US housing market who struggled to repay their loans, spreading losses to financial institutions globally through interconnected credit markets. The crisis impacted developing countries through lower exports due to reduced demand from industrial nations and less foreign investment as risk appetite declined. Central banks addressed the crisis through liquidity injections and government rescue plans, while major banks consolidated to avoid bankruptcy.

1. The Global Financial Crisis
:Created By
Islam Basheer
Ibrahim Abuoda

2. Content:
Introduction
Cause of the crisis
Impact of financial crisis
Solution Of financial crisis

3. INTRODUCTION

4. INTRODUCTION
♦ On February 7, 2007 one of the world’s largest
banks, HSBC, announced losses related to U.S. sub
prime mortgage loans. A couple of months later, on
April 3, New Century Financial, a sub prime
specialist,, Bear Stearns told an incredulous financial
community that two of its hedge funds suffered large
losses related to sub prime mortgages .

5. INTRODUCTION
♦ Other Wall Street standard-bearers also started
reeling from bad investments, . Before the end of
August the crisis had spread to some French and
German banks, and prompted the Federal Reserve
and the European Central Bank to pump liquidity into
the banking system and to reconsider their interest-
rate policies.

6. Cause Of The Crisis

7. Cause of the crisis
s Expanded U.S. financial institutions to grant
housing loans largely on the one hand, and
increased the percentage of loans to the value
of the property (housing) on the other. Has
provided financial institutions such loans to a
large number of consumers

8. Cause of the crisis
Cowners credit bad in the sense that their
willingness and ability to repay loans is low and
thus stumble upon solutions dates of repayment
of loans, which affects the development of
financial institutions that granted loans, and then
not being able to fulfill their obligations and
collapse.

9. Cause of the crisis
CThere is a particular property is characterized by
financial and banking institutions a large degree of
overlap between them.
On the other hand, there are other characteristic
features of the financial sector is that when the
collapse of the financial institution because of a bad
situation affects
this affect to another financial institutions
depositors
Which the financial position of the most good.

10. Cause of the crisis
s And then resort to withdraw their deposits
Thus, the sudden withdrawal of deposits lead to the
collapse of the financial institutions even if it is
placed well and healthy. This is called the domino
effect, so that if she broke down and one sheet of
paper to the rest of the dominoes game cards
collapsed, so we find that the intervention of central
banks in these cases is essential.

11. Cause of the crisis
s Launched the start of the new crisis with
the announcement of a giant financial
institution, is the Lehman Brothers'
bankruptcy for a symbolic beginning of
the dangerous, because of this great
institution was one of the few companies
that survived the massacre of the Great
Depression in1929.

12. The Impact Of Financial Crisis

13. Impact Of Crisis
◊ For many developing countries, the U.S. credit
crisis will mean slower growth and rising
inequality. The effects will be protracted. And
the nature and degree of impact will vary widely.
Some countries, notably those with extensive
foreign exchange reserves and strong fiscal
positions, will be much better able to cope than
others. But overall the crisis is very bad news for
developing countries and especially for the poor.

14. Impact Of Crisis
◊ Impacts felt through two channels. First, lower
growth in the industrial countries will mean less
demand for developing countries’ exports, both
manufactured goods and most commodities (gold
will be a notable exception). A few developing
countries are growing based on domestic demand
but many are growing based on exports, and for
them sagging rich-world demand will be a
problem.

15. Impact Of Crisis
◊ The second channel is reduction in capital inflows
to developing countries. Because the U.S. crisis has
created a global credit crunch, investors are
becoming more risk averse and thus less willing to
invest in developing countries. As uncertainty and
risk have increased in international capital markets,
investors will continue to shift the composition of
their portfolios, away from riskier assets, such as
emerging markets securities, and into traditional
stores of value, such as U.S. treasury bonds and gold.

16. Impact Of Crisis
 A crisis of liquidity in global financial
markets.
Reduced demand for raw materials and
especially the oil resulting in a lower
price.
Bankruptcy a large number of major
international companies in several areas
linked.

17. Impact On Arabian Area
(Arab gulf states & Egypt ) are the most
Arabian countries affected by the global crisis.
Due to close contact with global economy.
Decline in oil prices and the Arab
Gulf States are still suffering from
this inflation in the financial crisis .
This led to a decline in exports to
300 billion . Many of the large
projects that were interrupted by
the financial crisis.

18. Impact On Arabian Area
Generally the impact on arab countries differs from
one country to another, especially the non-oil
countries, and also closely associated with global
markets fell gradually affected by the financial crisis
than other countries.

19. Solution Of Financial Crisis

20. Solution Of Crisis
The U.S. government's rescue plan
presented to the House of Representatives $
700 billion and, after deliberations between
rejection and acceptance was approved by the
Council of Representatives and the Senate.
•The emergence of incorporation
companies (fusion) and sales of a
number of big companies to save it
from bankruptcy.

21. Solution Of Crisis
• Many of large central Banks provides large
number of countries around the world with
billions to ease the liquidity crisis , such as the
U.S. Federal Bank and Japan's central bank
and the German Central Bank .
The crisis continues, and
continues ..................