RESEARCH PROPOSAL

Recent Financial Crisis Impact On Savings And Retirement

ACKNOWLEDGEMENT

I would first like to express my gratitude for my research supervisor, colleagues, and peers and family whose immense and constant support has been a source of continuous guidance and inspiration.

DECLARATION

I [type your full first names & surname here], declare that the following dissertation/thesis and its entire content has been an individual, unaided effort and has not been submitted or published before. Furthermore, it reflects my opinion and take on the topic and is does not represent the opinion of the University.

Table of Contents

ACKNOWLEDGEMENTii

DECLARATIONiii

CHAPTER 1: INTRODUCTION5

Significance6

Objective6

Research Question/Hypothesis6

CHAPTER 2: LITERATURE REVIEW7

Risk management8

On Risk Capital9

Credit Risk10

The operational risk12

CHAPTER 3: METHODOLOGY13

Search Technique14

Literature Search15

REFERENCES16

CHAPTER 1: INTRODUCTION

The current financial crisis can be attributed to the U.K. housing bubble which began in late 1990 and continued until 2006(Horiuchi 2008 1). Housing prices increased significantly during this period without any fundamental change in the factors that usually cause an upward shift in prices. Borrowers and lenders were of the view that housing prices continue to rise indefinitely. Nobody was looking at the fundamentals as investors were blinded by a phenomenon known as "information cascade". Despite the market downturn before and after the NASDAQ market in March 2000, no one seemed concerned that the housing bubble could burst soon at some point in time, although it was difficult to understand that house prices were too high for justified. The speculatively driven by low interest rates over a long period and a lax approach by the bankers and mortgage companies led to a boom in subprime mortgages (Homoud 2004 71).

Significance

The purpose of this study is to validate the concern that banks' increasing involvement in securitization activity of banks restricting lending, and the degree of credit risk tolerance. Theoretical claim that securitization reduces the credit risk; therefore, reduce the banks credit risk aversion. Subsequently, the banks would be encouraged to increase its percentage of assets subject to credit risk activities, which is providing economic sectors. However, banking statistics dictates that lending banks is declining, while banks' securitization activities are increasing.

Objective

This study will be an empirical exploration of how the participation of banks in securitization activity affects their financing activity. In particular, this study will investigate whether securitization encourages complementarily "financial activity is to reduce banks or banks willingness to extend financing. Then, an exhibition of the effects of securitization in the financial profile of banks will be addressed.

Research Question/Hypothesis

The study will aim to answer the following research questions:

What are the factors that are functional in exposing banks credit risk management?

How could credit risk be managed in banking?

What are the factors that guarantee bank security in the current scenario?

CHAPTER 2: LITERATURE REVIEW

Originally, banks used to follow a model called "originate and hold." Under this model, the bank lends money and collects payments from borrowers thereafter until the loan is paid. In this situation, the bank assumes the credit risk, and therefore, is very careful in assessing the creditworthiness of borrowers (Haron 2000 ...