Global Financial Crisis on Rabobank Free-Samples for Students

Question: Write a report analysing a Global Financial Institution (bank). Answer: Impact of global financial crisis on Rabobank: Rabobank survived the financial turbulence of 2007 to 2010 without receiving any assistance from government. Due to credit crisis, bank did not fall out from escape of financial crisis. Regulatory environment and business of banking industry changed drastically due to triggering of economic recession caused by credit crisis. At the end of financial year 2013, due to involvement of Rabobank in Libor affair incurred reputational damage. Bank has achieved higher net profit than previous year and this was the tradition of before 2009. Such tradition was broken due to poor economic recession in Netherland rather than writing off resulting credit crisis (Anginer Demirgu, 2014). The loan portfolio has result in bad debt ratio cost due to economic downturn. Due to strong competition in this field, low margin on savings were faced by bank. In year 2010 after the climax of crisis, bank experienced bouncing back of profits to an all-time high. This high figure was mainly attributable to interest rate development, lower loss of credits and resulting higher revenues from global financial market activities. There was written down of operations of rabobank and some specific losses and the profits will remain subdued for years to come. After and before the global financial crisis, Rabobank was paralyzed by its own good performance and it was reported than bank is acting with arrogance. Bank has written down around six percent of its total equity due to global financial crisis. In the face of financial turmoil, credit rating and high capitalization rate of bank has proved to be powerful assets for surviving crisis. Bank was having capital buffers and solid liquidity and this reason was attributable to retaining good access to professional fundin g (Goldbach, 2015). There was negative impact on bank due to loss of confidence and an environment of low interest in the wake of global financial crisis. Recovery of Rabobank: The financial solidity of Rabobank was never questioned due to difficulties faced after the global financial crisis. In light of challenges faced by Rabobank due to global financial crisis, some fundamental measures were taken by bank for coping up with such challenges. Bank took actions to increase the reservation capacity and visualization of services and products. Bank recovered from this crisis, by securing solid financial profile and strengthening distinctive cooperative nature. Rabobank structured new corporate governance that was intended to maintain trust of external and internal stakeholders (Minoiu Reyes, 2013). Bank operated with lower cost to income ratio in after the global credit crisis. In the dead hand of Rabobank, the maximization of equity is done by calling for profit. Organization has embarked on new visualization program that has resulted in loss of jobs in many cases. The wholesale business of bank was refocused toward the activities that are customer oriented and they mostly concentrated on international activities. Organization has financed its expansion through issuing hybrid capital instruments and it did not compromise its solvency position by member certificates (Hale et al., 2016). A growth plan was formulated by moderating the growth of assets and reservation capacity. Reference: Anginer, D., Demirguc-Kunt, A. (2014). Has the global banking system become more fragile over time?.Journal of Financial Stability,13, 202-213. Goldbach, R. (2015). Global Financial Instability and the Evolution of Global Banking Regulation. InGlobal Governance and Regulatory Failure(pp. 20-44). Palgrave Macmillan UK. Hale, G., Kapan, M. T., Minoiu, M. C. (2016).Crisis transmission in the global banking network. International Monetary Fund. Minoiu, C., Reyes, J. A. (2013). A network analysis of global banking: 19782010.Journal of Financial Stability,9(2), 168-184.