Financial markets subject Research Paper Example | Topics and Well Written Essays - 3000 words

Financial markets subject - Research Paper Example Our analysis relates to the determinable impacts of the GFC on the middle-eastern financial markets with specific focus on the financial markets of Qatar and other Gulf Cooperation Council members. The widely known cause of the recession is the collapsing of the housing bubble in the US in 2006; the bubble was created as a result of lenient credit terms and easy initial availability of housing mortgages, based on the perception that property prices are always likely to appreciate. The initiation of easy credit was made by certain US based banks following the inflow of funds from the booming Asian markets. Collateralized Debt Obligations (CDOs), that were relatively recent financial instruments, promised residential properties as the security against default; this gave further incentive to the banks to lend out customized loans. The collapse, which resulted from rising interest rates leading to a multitude of defaults, caused a significant drop in the prices of securities that were co llateralized with the housing market. This, in turn, resulted in several financial institutions facing the risk of solvency as speculations regarding huge liquidity shortage rose, causing a great stir in the stock markets world-wide, ending up in record-setting lows (Rashwan, 2012). However several economists debate that financial markets in the middle-east, specifically the GCC countries, were somewhat shielded from the devastative impact that certain Western economies faced. Our analysis will highlight reasons on whether it would be fair to conclude this and if so, on what grounds can we claim economies relating to the gulf cooperation council as any different. Project Objectives: To present a brief reasoning behind the Global Financial Crises 2007-2009 To assess the difference between the impact of the Global Financial Crises on the western markets and in the GCC Countries To determine reasons why the financial markets in Qatar and other GCC countries responded to the crises diff erently To assess whether Islamic financing investments have a contribution to the lesser risk exposure of the gulf markets To draw conclusions on whether there are possibilities for western markets to open up avenues of introducing alternative financial instruments following the impact of the GFC Literature Review: We intend on looking up related literature in order to analyze the impact of the GFC on the middle-eastern financial markets, to devise a conclusive analysis on what factors were responsible for the relevant markets to react differently than most of the West, and to formulate deductive reasoning on whether an alternative form of financial instruments might prove to be a securer investment on the macroeconomic level. To obtain supporting information we will take assistance from a combination of primary as well as secondary sources of information, focusing primarily on related articles and scholarly journals. With the GFC being one of the major contributors for financial d ownturns in history, we hope to obtain appropriate market information that will be sufficient enough for us to reach conclusive grounds by the end of