Volpi Michael INBA 1 Financial Crisis ___________________________________________________________________________ Since the end of the Second World War, America became

the decision maker of the world, on the financial level, military, political, cultural and economic. The M arshall plan in 1947 shows the degree of membership of the countries of Western Europe to this economic giant, then in 1949 with NATO (North Atlantic Treaty Org anization), on the military level. Moreover English is the international languag e and liberalism is exported in more and more expending countries. The supremacy of the USA on the world confers a decision-making power to them an d unfortunately, when the USA coughs, the world gets flu. I) The international crisis, because of the USA? 2006, more and more from houses in the United States and more precisely in Calif ornia are sold because of the very low interest rates which are allotted to many American seeking a good at this period. Unfortunately, that involves a fall of the real values. The interest rates were variable they reach quickly in 2006 in unexpected values of those who had been involved in debt. Gradually the market of banks networks weakened to arrive in 2007 to the crisis of one of the most important banks of the United States, the Lehman Brothers ban k. After tried to save without success its real estates, the court of the action s of the bank falls of 90%. The Lehman Brothers gone bankrupt the 15th of Septem ber of 2008. All banks of the United States are touched, they lost the trust the y had between eachother, and that is going to touch banks of the world pretty so on, and that happened. II) The economy of the world is touched. Banks are a network, they give money to eachother everytime because they trust. But because of the subprime crisis, they stopped to give money to eachother to t ry to recover the money they lost in. Lehman Brothers stopped its activities bec ause no one bought it as quickly as they imagined. Now, the money banks gave to this bank is lost forever. And banks of the world stopped their activities one a fter the other. And some of them have been bought by the government to same them . The real consequences of this crisis are on the economic growth. The hea rt of a market society is the confidence. Households lost trust and they don t consu me anymore or at least, less. It is the same thing with corporations while they are the motor of growth. Corporations have stopped their investment and because of that they give vacations to their employees for an undetermined period. Banks gone bankrupt all around the world because of the financial globalization. Ultr aliberalism wasn t really the good solution for the world economy. III) Ultraliberalism is going to reduce itself. Governments of the world have decided to reduce ultraliberalism. It is t he typical example of the USA and France. Government has to intervene to restore trust and confidence. There will be a return of regulation. The capitalism was too much liberal and pushed governments to enter in the world of markets. The co mbination of governments intervention will work because they are more powerful than markets; they are able to close markets down, close corporations and write new rules and laws about markets and stock exchange. The 15th of November, presidents of 20 important countries of the world met eachother in Washington to decide how to do to reduce and perhaps stop the c risis. They conclude with the aim of taking place in stock exchange to reduce th eir freedom. Governments will help banks to loan money to re-institute confiden ce they lost with subprimes.

To conclude, we could say that America has always been the first nation to decide about the economy of the world. New York is the financial capital of t he world. But ultraliberalism also showed its maximum in markets freedom and the necessity for the government to give bailouts to banks and intervene on the sto ck exchange. Banks are a network and if one of those collapses, it is all the ot hers which are going to be bankrupt. There is only one actor which is able to gi ve back confidence, the government and all presidents concerned have understood the solution.