too big too are unsuccessful assignment

Category: Finance,
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Financial institution

The movie Too large to fail is around the recession in 2008, where everyone is able to see how a few decisions made affected the various people active in the economy in the U. S. Throughout the film there is a great ethical issue that was always present. Paulson wished to stop the crisis in any way no matter what that they had to do regardless if they had pass over the law. In the movie, the case of Endure Stearns already passed and today the switch was to get the Lehman Brothers Business.

In the case of Bear Stearns, Hank Paulson will take the decision to behave and preserve the company. Fuld, Lehman Brothers CEO thought that the company was also going to be kept by the government, but this time Paulson didn’t want to do it because every CEO had to take responsibility of their actions. In this manner he would like that everyone has an ethical behavior in the development of the economy.

Another situation can be seen in the negotiations of Lehman’s Siblings and the Koreans where Fuld didn’t want to sell the shares at an affordable without thinking that didn’t influenced just him, but the whole market.

In this case doing the right thing people needs to sacrifice some thing; Fuld don’t think how big the problem throughout the economy was. Another big dilemma from this crisis was the fall of Fannie Mae and Freddie Mac. The Chinese plus the Russians may collapse the U. S economy in the event that Paulson did not take activities about Fannie Mae and Freddie Mac. That is why he decided to save the company and the government got control of it. This confirmed how Paulson contradicted himself of what he stated about the truth of Lehman Brothers. This was not the only thing that occurred. Also AIG was in concerns and Paulson decided to action making that Paulson lose credibility in some manner, but do everything in his hands to save the recession of 08.

Henry Paulson and Bill Bernanke had to do something about the crisis. With Bernanke, Paulson decided to go to the congress and inquire for $700 billion to save lots of the marketplace of the U. S. The congress determined that this has not been possible, and so they had to consider other options. Paulson decided to apply something from the bill exceeded by the our elected representatives. They had the possibility to put in capital for the most important corporations of the economic system of the U. S. Paulson didn’t agree with this thought because each time, as the CEO of Goldman Sachs, he fought against the add-on of the government in these organizations. Against his personal beliefs, Paulson in some way bought the banks to accept the injection of capital to produce confidence towards the customers and some way preserve the economy of the U. S.

For me this decision of the U. S Department of Treasury and the Federal Reserve was the correct 1 for that “Second Great Depression if each of the financial institutions flattened. Creating assurance in the consumers and buyers was something that they had to accomplish to unfreeze the market. In the end I think which the government will have to spend more and more money to fix the issues. This economic crisis will affect the entire world, and some 1st world countries have good lot of complications. Maybe a lot of emerging economies (like Latina American ones) would have another picture worldwide and will be leading the world down the road. In this case I agree that Paulson and Bernanke took suitable actions, even acting against Paulson’s personal beliefs, yet thinking about the best answer for a nation that is at risk of blowing out it is entire economic climate. I agree that they decided to take action and conserve the economy for this reason I think that they took the proper actions.


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