RESEARCH PROPOSAL

Research Proposal

Research Proposal

Abstract

This abstract will provide a short overview of the following research proposal on the topic of: Evaluate the impact of sovereign debt crisis on the business strategies of the UK banking system.

Background

This chapter will provide an overview of the sovereign debt crisis in the European countries, as well as, the business strategies that the banks of UK have made to counter the effects of the crisis.

Methodology

In the next chapter will provide an overview of the methodology that will be used in the research. This part will also throw light on how the research will be conducted. It will be split into primary, which includes interviews, questionnaires, data collection & sampling. Secondary methods of research like books, databases, internet will also be used.



Results

This chapter will explain the ways in which the results will be interpreted and calculated. The results will be interpreted making use of the chosen criteria which are reliability and validity.

Difficulties

The difficulties that will be faced during the research will be identified and the proposed solution to these difficulties will also be provided to make sure that the research goes on in a smooth and a continuous manner.

Background

Rationale For The Research

The crisis of European sovereign debt, also called crisis of the euro or euro zone crisis is a financial crisis currently under way that has made it difficult or impossible for some countries in the euro zone to refinance its debt without the assistance of others. Since late 2009, fears of a sovereign debt crisis began to grow among investors as a result of increased levels of private and public debt worldwide while there was a wave of downgrades in the credit ratings of government debt between different European states (Emese, n.d. 2011).

The causes of the crisis were different depending on the country. In many countries, private debt arose as a result of a bubble in the price of real estate assets was transferred to sovereign debt, and that as a result of the public bailout of failed banks and measures of government response to the post-bubble economic weakness (www.nytimes.com). The structure of Euro zone as a currency union (ie, a bond exchange) without fiscal union (that is, without rules or tax on pensions) and contributed to the crisis had a strong impact on the ability of European leaders to react. The European banks have property in considerable amounts of sovereign debt, so the concern about the solvency of the European banking systems or on the creditworthiness of sovereign debt negatively reinforcing (Hewitt, n.d., 2010).

In the fall of 2011, the European banking and financial system was on the brink of collapse, and the long-term sustainability of monetary union was seriously threatened, the markets were closed wholesale bank funding, especially for longer maturities, the risk of a contraction in the credit (credit crunch) with significant effect on economic growth and employment was very high, market analysts agreed in considering likely a break monetary union (Firzli, ...