Issue 1
Sub prime mortgage loan
The immediate and main cause of the current financial crisis is the booming of the United States housing market, which took place between the years 2005-2006 (see appendix 7 form more details).
Failure to pay the “sub prime” was very high, and starts to increase rapidly. Most banks gives borrowers easy facilities and incentives like long-term trend of rising the price of housing which had give borrowers the confidence that they will be able to quickly refinance at an excellent terms.
Refinancing became more difficult after the rise of the interest rates and the drop of the housing prices between 2006-2007.
It is visible that UAE (See appendix 4 for more details) starts to feature financial problems as much as the rest of the world.
The Central Bank in UAE during early eighties implemented a law challenged to limit exposure to the real estate sector. This law stated that banks that are operating in the domestic market would be allowed to lend only 20% domestic deposits for the purchase and development of a land. As a result, new developers in UAE found it very difficult to obtain finance for their new projects as banks are on the edge of Reaching the authorized limit of 20% on funding to real estate.
Consumer behavior is shifting with the current boom and many of the banks wish that this law would reverse. This law still existing but not cancelled; and lenders as a result become more selective.
People in general have ignored the risk involved in taking out loans. Most of them did not prepare a plan to finance their properties, ignoring that the original amount, which was borrowed, would grow by time, which resulted in facing debt problems.
Issue 2
The world financial market was shocked from Dubai’s debt crises, with increasing concern that some UAE banks tighten lending and stall the recovery of global economy.
UAE banks need to feel confident about lending to continue with its economic strength. The troubles that Dubai face caught investors by surprise. And after one year the global crash disrupt the city effecting the growht in ints main investment arm and was seeking six-month delay on repaying its $60 billion debt. The responses from the credit agencies was cutting debt ratings on the state companies of Dubai because they may consider the plan a default.
Wednesday, May 26, 2010
Introduction
During the year 2008, American financial centers were hit with a series of bankruptcies that take most experts by surprise. These crises were part of an outline of economic fail which includes sub prime crises and the decline and reject of the real estate bubble
The sub prime mortgage loans lost banks trillions of dollars during the year 2007. “sub prime” is used to describe the practices used by different banks in giving people loans with bad debt histories and limited borrowing experiences.
As a result, a huge number of borrowers fail to pay their loans leaving banks with maximum losses that couldn’t be closed out.
As the financial crisis rapidly spreads around the world, UAE was selected in specific, due to the fact that the economy in this country slowed unexpectedly.
Talking about UAE crises in specific was a great challenge, due to the difficulties in finding the serious people to contribute in answering the required survey and give their feed on the current financial situation in UAE and how this issue affect them and will affect them in the long run.
I will arguer on the importance of the importance of financial awareness and financial education required to assist people in their financial decision.
In UAE it is debatable whether there was a delay in recognizing the seriousness of the crisis. But it seems that the governments and central banks in the country responded appropriately to this challenge.
Some of the information was supported by the alarabiya new channel articles which helped to give an over view of the current crises in UAE.
To conclude an interview will be conducted with Abu Dhabi Commercial Bank and a survey questionnaire will be distributed to targeted people to have their feed back on the effect of the crises on them.
During the year 2008, American financial centers were hit with a series of bankruptcies that take most experts by surprise. These crises were part of an outline of economic fail which includes sub prime crises and the decline and reject of the real estate bubble
The sub prime mortgage loans lost banks trillions of dollars during the year 2007. “sub prime” is used to describe the practices used by different banks in giving people loans with bad debt histories and limited borrowing experiences.
As a result, a huge number of borrowers fail to pay their loans leaving banks with maximum losses that couldn’t be closed out.
As the financial crisis rapidly spreads around the world, UAE was selected in specific, due to the fact that the economy in this country slowed unexpectedly.
Talking about UAE crises in specific was a great challenge, due to the difficulties in finding the serious people to contribute in answering the required survey and give their feed on the current financial situation in UAE and how this issue affect them and will affect them in the long run.
I will arguer on the importance of the importance of financial awareness and financial education required to assist people in their financial decision.
In UAE it is debatable whether there was a delay in recognizing the seriousness of the crisis. But it seems that the governments and central banks in the country responded appropriately to this challenge.
Some of the information was supported by the alarabiya new channel articles which helped to give an over view of the current crises in UAE.
To conclude an interview will be conducted with Abu Dhabi Commercial Bank and a survey questionnaire will be distributed to targeted people to have their feed back on the effect of the crises on them.
Sunday, April 25, 2010
Gathering primary (= your own) data about your topic
Please write answers to the questions below, and bring this sheet to class on Wednesday.
Name: Fatma Alsayed Nasser Al Hashemi
1. Research Topic: Financial Crises in UAE
2. Method(s): Survey? x Interviews? o Observation? o
3. Who will you ask/observe? (e.g. age, gender, nationality, occupation)
Male individual’s works in banks and other financial institutions. The target group are individuals of 30 years and above. Nationalities will include local and Arab expatriates who works in higher positions.
4. How/where will you do this? How many people will you ask/observe? How long will it take? If you are going to observe something, at what time of day will you observe?
I will target around 50 people and will visit financial institutions in Abu Dhabi where I can gather all the information I required. The survey will take around one week and will be done during morning time.
5. Are you looking mainly for facts or for opinions? How will your data add to what you have learned from your reading?
I will look for facts and add my opinion to it. The data which will be collected will be a practical prove that will be added to the theoretical part of the survey.
6. If you are going to use a survey or interview, write your questions below.
If you are going to do interviews, for each question try to add a “follow-up” question to get more information if the person does not give much.
If you are going to observe something/somebody, make a table to use when you are observing. (Remember that when you are observing you will only have time to write very short notes or marks).
Question
Survey Outcome
1
Had some people get directly affected by the current financial crises, did it affect their personal life?
2
In observing clients financial situation, what are their top worries about it?
3
For the next two years to come, do you think clients have strong confidence in the UAE economy?
4
What is the client’s general view in the world economy in the years to come?
5
What do you say about the expatriate populations who have put their belief and hard earned money into buying property?
6
What have been the priorities of the bank in responding to this crisis? Which social groups of people have been prioritized?
7
What sorts of financial measures have been adopted to respond to the crisis and what have been their effects?
8
What recommendations would you make to the bank to ensure that its policies are in compliance with human rights especially during the times of crises?
7. When you have decided on your questions/ observation table, try them out with two or three people, and see if they find your questions clear. Is it easy to use your method? Are you getting enough reliable information? Write a short paragraph below, explaining how your trial went, and how you might improve your method.
I made a phone interview with Sr.team leader/loans in Abu Dhabi Commercial where I asked her to provide me with her point of view on the current financial crises in UAE and how it had directly effect clients who possess higher positions. And what is their future plan to overcome their current financial situation.
She was so clear in her answers but could give only a rough figures on the number of people who have directly been effected by the current financial crises and dividing them into groups as per their age and occupations.
Please write answers to the questions below, and bring this sheet to class on Wednesday.
Name: Fatma Alsayed Nasser Al Hashemi
1. Research Topic: Financial Crises in UAE
2. Method(s): Survey? x Interviews? o Observation? o
3. Who will you ask/observe? (e.g. age, gender, nationality, occupation)
Male individual’s works in banks and other financial institutions. The target group are individuals of 30 years and above. Nationalities will include local and Arab expatriates who works in higher positions.
4. How/where will you do this? How many people will you ask/observe? How long will it take? If you are going to observe something, at what time of day will you observe?
I will target around 50 people and will visit financial institutions in Abu Dhabi where I can gather all the information I required. The survey will take around one week and will be done during morning time.
5. Are you looking mainly for facts or for opinions? How will your data add to what you have learned from your reading?
I will look for facts and add my opinion to it. The data which will be collected will be a practical prove that will be added to the theoretical part of the survey.
6. If you are going to use a survey or interview, write your questions below.
If you are going to do interviews, for each question try to add a “follow-up” question to get more information if the person does not give much.
If you are going to observe something/somebody, make a table to use when you are observing. (Remember that when you are observing you will only have time to write very short notes or marks).
Question
Survey Outcome
1
Had some people get directly affected by the current financial crises, did it affect their personal life?
2
In observing clients financial situation, what are their top worries about it?
3
For the next two years to come, do you think clients have strong confidence in the UAE economy?
4
What is the client’s general view in the world economy in the years to come?
5
What do you say about the expatriate populations who have put their belief and hard earned money into buying property?
6
What have been the priorities of the bank in responding to this crisis? Which social groups of people have been prioritized?
7
What sorts of financial measures have been adopted to respond to the crisis and what have been their effects?
8
What recommendations would you make to the bank to ensure that its policies are in compliance with human rights especially during the times of crises?
7. When you have decided on your questions/ observation table, try them out with two or three people, and see if they find your questions clear. Is it easy to use your method? Are you getting enough reliable information? Write a short paragraph below, explaining how your trial went, and how you might improve your method.
I made a phone interview with Sr.team leader/loans in Abu Dhabi Commercial where I asked her to provide me with her point of view on the current financial crises in UAE and how it had directly effect clients who possess higher positions. And what is their future plan to overcome their current financial situation.
She was so clear in her answers but could give only a rough figures on the number of people who have directly been effected by the current financial crises and dividing them into groups as per their age and occupations.
Monday, April 12, 2010
Small story 2
Abu Dhabi Commercial Bank was a good resource and example that provides services/ payment plans for customers. This payment plan includes payment period, eligibility, minimum salary requirements, maximum loan amount, interest rate and documents required for loan.Another good source was the trading economics, a global economics research which gives and explanation of the current UAE banks interest rates, growth rates, inflation rates.
Monday, March 29, 2010
Wednesday, March 17, 2010
Source 1
Is the UAE affected by the financial crisis more than the US?
Yes, according to business pundit website, the UAE international problems revolve more around money laundering than the US financial crisis.
http://www.businesspundit.com/10-countries-least-affected-by-the-us-financial-crisis/
Source 2
This source it will be helpful for my research paper because it’s a survey which was done on international business people of 24 nations to identify which countries they believe are surviving the crisis the best.
http://www.labnol.org/internet/countries-least-affected-by-economic-recession/8814/
Source 3
This will be helpful because it shows a solution for the governments of the GCC countries should draw lessons from this experience and develop new strategies to better manage their assets in the UAE
http://www.uaepropertytrends.com/ptrends/mvnforum/viewthread?thread=3322
Source 4
This source will be helpful for me when I’ll write an example about the credit crunch in the UAE (Dubai) that Most UAE banks were already owned or partly owned by the governments and therefore did not need to have money pumped into them like the rest of the world banks.
http://www.overseaspropertymall.com/forum/dubai-property/t-how-has-the-credit-crunch-affected-dubai-1333.html
Source 5
This book will be helpful, I can find more information about the financial crisis by looking at the index. I found some points like the financial life cycle, financial futures, and other points..
In page 88 there are the disadvantages of using credits and the credit cost.
Personal Finance An Integrated Planning Approach, Fourth Edition.
Is the UAE affected by the financial crisis more than the US?
Yes, according to business pundit website, the UAE international problems revolve more around money laundering than the US financial crisis.
http://www.businesspundit.com/10-countries-least-affected-by-the-us-financial-crisis/
Source 2
This source it will be helpful for my research paper because it’s a survey which was done on international business people of 24 nations to identify which countries they believe are surviving the crisis the best.
http://www.labnol.org/internet/countries-least-affected-by-economic-recession/8814/
Source 3
This will be helpful because it shows a solution for the governments of the GCC countries should draw lessons from this experience and develop new strategies to better manage their assets in the UAE
http://www.uaepropertytrends.com/ptrends/mvnforum/viewthread?thread=3322
Source 4
This source will be helpful for me when I’ll write an example about the credit crunch in the UAE (Dubai) that Most UAE banks were already owned or partly owned by the governments and therefore did not need to have money pumped into them like the rest of the world banks.
http://www.overseaspropertymall.com/forum/dubai-property/t-how-has-the-credit-crunch-affected-dubai-1333.html
Source 5
This book will be helpful, I can find more information about the financial crisis by looking at the index. I found some points like the financial life cycle, financial futures, and other points..
In page 88 there are the disadvantages of using credits and the credit cost.
Personal Finance An Integrated Planning Approach, Fourth Edition.
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