Business Schools and Responsibility for Preventing Financial Crisis Essay

Business Schools and responsibleness for Preventing Financial Crisis - Essay Example be currently facing. But it has been argued by several observers that the dividing line schools be possessed of failed to provide preventative measures for current global monetary crises. These observers have argued that lack of relevance of these business schools, masking unethical behaviour of these business schools and creating negative impacts on the people and firms or business organisations atomic number 18 creating barriers for providing preventive measures in favour of prevention of current financial crises. Many observers have argued that managers after getting passed go forth from the best business schools do the same job in banking sectors or in the share markets which keister be done by people having no background of studying in business schools (Canals, 2009, pp.42-43). These managers are adding nothing new in these sectors. Business schools bear a certain responsibility for (no t preventing) the current financial crisis. Nature of current financial crises Almost all the economies of the world are facing problems in impress to their economic growth process due to the prevalence of financial crises that these economies are facing mainly since 2006-07. ... These are resulting in further decline in global income and hence decline in peoples purchasing power. fit to many researchers, including Noble laureate Paul Krugman, these global financial crises are results of scummy and ineffective banking and financial system of the developed economies of the world like European economies and mainly American economy. According to Paul Krugman the banking and financial system of these economies has been largely dependant upon the free market forces. These banking and financial systems had no tally over the funds or assets which are circulating in the global economy. They became more and more concern about creating new funds and hence they have started to provide mo re and more loans to people and business organisations. But when one defaulter defaults to pay his loan, the entire system collapsed due to the fact that the structure of providing loans was dependent on multiple layers. When one lower level of layer collapsed, the entire structure first became seismal and then it collapsed. But the most notable impact has been realised when there occurred a significant reduction in Gross Domestic Product (GDP) in the major global economies of the world, mainly in the European countries. Between 2009 and 2010 rate of fall of GDP in the countries of the European Union has been estimated as 4%. This elevated rate of fall of GDP forces many countries of the European Union, such as Greece, Portugal, Italy and Spain, to take loans from International monetary Fund (IMF) and World Bank. These nations are also forced by these international organisations to curb down their existence spending on different goods and services, including production and cons umption expenditures. In this context these countries cut down