Subprime Crisis and Tesco

3246 Words13 Pages
Business in Focus SID:0920713 Table of contents: Introduction Pg1 1. Causes of the global financial crisis Pg2 1.1 Subprime Crisis Pg2 1.2 Creating more risk by trying to manage risk Pg3 2. Effects of the global financial crisis Pg3 3. Impact of the crisis on Tesco Pg5 3.1 Tesco: background Pg5 3.2 Tesco before the world crisis Pg6 3.3 Tesco during the crisis Pg7 4. Conclusion Pg10 Q.B. Examine and analyse the impact of the global financial crisis of the last two years, and examine its impact on a business of your choice. INTRODUCTION You probably won’t meet a single person that is living in an economically advanced country and doesn’t know what the economic crisis is, also known as the ‘Credit crunch’. Longman English Dictionary explains that credit crunch is: “Banking economics when borrowing money becomes difficult because banks are forced to reduce the amount they lend” (Longman 2007). This means that when the credit crunch struck banks were forced to reduce the amount of money they lend to people. This was due to a huge amount of “bad debts”. In other words people started to borrow too much and couldn’t repay it back. Anup Shah, from the Global Issues website says: “The global financial crisis, brewing for a while, really started to show its effects in the middle of 2007 and into 2008. Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems. On the one hand many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown will affect the livelihoods of almost
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