CREDIT CRISIS AND HUMAN

BEHAVIOUR

To learn how this credit crisis happened we will have to look into the actual process where it all started .

DAWSONS FAMILY

INVESTORS

Dawson's are interested to buy this house.FACTORS :1) Very less money 2) House prices are increasing every day 3) Needs money which can be repaid

easily .

BANKS can solve Mr Dawson's issues . 1) They can provide a mortgage to help him buy this house at a very easy repayment option

BANKS

MORTGAGE

BANKS

WHERE DO BANKS GET THIER MONEY FROM ?

InsuranceCo.

Mutual Funds

Soverign funds pensions

funds

Individualsavings

ETC.

We have listed a few sources above .

BANKS

Banks now starting getting their monthly instalments paid by the families who took the mortgage at a particular rate of interest .

Mortgages were owned by the banks.

And this meant that the banks would receive their invested money back with profit (the interest received for the mortgages provided).

Mortgages were for long term period .

Investors started offering banks a nice deal in return of these mortgages .(As they would not be able to get such better returns anywhere else.)

Mortgages were only given to people who were eligible .

BANKS

INVESTOR

PURE PROFITS are earned

Borrowed capital is returned

BANKS

BANKS

BANKS

LAWSONS FAMILY

BANKS

BANKS

Maslow’s Theory of Motivation :

Investors : Higher Returns of InvestmentCustomers : Social StatusBankers : Rewards

TRIATS OF HUMAN BEHAVIOUR

Not Challenging superiors decisions.

Threat of punishment.

Preferred to be directed.

Avoid responsibility.

Motivated by monetary gains( performance appraisal-incentive, bonus & profits.)

Personal growth- career growth

YES

CREDIT CRUNCH WAS CAUSED DUE TO HUMAN BEHAVIOUR OR PEOPLE ISSUES.

Dimpal Patel Pranali Shinde Madhvi Lola

Kirti PatelParth ShahJoy PurohitRakhi Naidu

Team Leader

Thank You

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