Current Recession in UK

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ACKNOWLEDGEMENT

I would like to take this chance for thanking my research facilitator, friends & family for support they provided & their belief in me as well as guidance they provided without which I would have never been able to do this research.

DECLARATION

I, (Your name), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, & this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views & not essentially which are associated with university.

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Table of Contents

ACKNOWLEDGEMENTII

DECLARATIONIII

CHAPTER 01: INTRODUCTION1

Background of the Research1

Problem Statement1

Aims and objectives of the study2

Research Questions2

Outline of the Study3

Rationale of the study4

CHAPTER 02: LITERATURE REVIEW5

Review of Financial Crisis of 2007-20085

Global Reaction to the Financial Crisis6

Real Estate and Recession8

Importance of Corporate Financing Decisions of a Firm10

CHAPTER 03: RESEARCH METHODOLOGY12

Research Methods12

Qualitative Research Method12

Quantitative Research Method13

Research Design13

Search Technique15

Ethical Consideration16

Timelines17

REFERENCES20

CHAPTER 01: INTRODUCTION

Background of the Research

Dang, Gary, and Holmstrom (2010, 125) described that the sub-prime mortgage crisis, which had started in the start of the year 2007, had developed into a matured financial crisis at the end of year 2008. The issues in the subprime mortgage loans sector of America had evolved into a wide spread credit crunch, which had swept over several markets of asset all over the world, which had made this financial crisis, the worst global financial crisis after the Great Depression of 1930s. This crisis had made a significant impact on the credit availability and; therefore, an impact on the corporate finance decisions of firms in UK. The lending standards and performance of the subprime mortgage sector before the 2007 global financial crisis have been widely studied in the loan level (Covitz, Liang and Suarez 2009, 58). There study focus on whether securitization decreases lending standards, especially in the subprime mortgage segment.

Problem Statement

Coval, Jurek, and Stafford (2009) said that credit shocks can aggravate financial constraints and reduce investment because firms cannot raise enough capital to fund all investment projects. It is likely that this behaviour will be more prevalent among firms that have higher levels of financial frictions. However, the inherent simultaneity of corporate financing and investment decisions makes this a difficult question to answer empirically. For instance, negative shocks to credit can often coincide with negative shocks to credit demand (i.e. deteriorating investment opportunities) making it difficult to identity how the credit shock affects investment. To overcome this difficulty, it is critical to identify a source of exogenous variation in the supply of credit.

Aims and objectives of the study

Before starting on the course of the research, a researcher has to decide upon the aims and objectives of the research study, which would help the researcher in conducting the research. The aims and objectives act like a guide for the researcher through which the researcher can deduce research questions. The aims and objectives of this research study are as follows.

Identify the factors contributing to the financial crisis and current recession in ...