Is a financial crisis inevitable An economic recession can be said to be a negative GDP growth experienced in two consecutive quarters characterized by growing unemployment reduced profits and investment declining demand for goods and services Since the time immemorial loss making is not a new phenomenon to firms but in large scale government borrowing and price discounting lead to the collapsing of financial institutions According to Foster Magdoff 2009 there have been frequent economic crises in UK and USA and from an economic perspective the financial crisis is inevitable The banks are becoming enormous gigantic complicated with the borrower creditors and counter agents on the rise With derivatives and securities under regulated and outgunning the government regulators I think that occurring of financial recession is unavoidable However the strict regulations on the activities that are taking place in most of the financial institutions can save the world economy from sabotages Wolf 2014 There are no similarities with the financial instruments that have caused economic recessions and without repetition of the causes it is becoming inescapable We are humans possessing cognitive inabilities to grasp complexities that come with the commercial systems and with banks growing in their intricacy size and activities with interconnections between lenders borrowers and counter agents managing affairs is not a walk in the park Wolf 2014
