Title: Saving the Companies Affected by the Current Economic Crises - at the Hand of Stakeholders and Accounting Professionals
Abstract: IntroductionThe break-out of the world economic crisis, which has initially started with a financial crisis, caused by unprecedented increases in credits (stimulated by a long period of moderate financial and economic conditions) is opening the road to changes affecting companies, stakeholders and the relationships between them, as well as to changes at the level of the whole society. These changes are rather answers, reactions, effects of the adaptation to the new unfavourable economic background. Usually, change involves multiple, ample, long processes, that are necessary for survival within new economic coordinates and which use specific tools, whereas one of the most important is communication.Our paper presents the current situation and the causes of the economic crisis, aspects related to corporate governance and the role of the stakeholders in the enterprise's life and the economic environment, but also the reaction of the stakeholders to the current economic changes. Last but not least, we presented the role and importance of communication in times of financial crisis, as main survival factor and even exit from the crisis.1. Current Situation and Causes of the Economic CrisisThe financial crisis that broke out in the summer of 2007 is striking in its magnitude, its speed of spreading internationally and in its persistence, since it is far from being over. At present, the financial world is characterized by risk adversity, reduced liquidity, price volatility, uncertainty regarding the future of financial institutions, doubts related to the quality of the structured credit products and uncertainty about the macroeconomic prospective in general. A number of factors contributed to the break out of the current economic crisis, among which: the expansionary macroeconomic policies of the United States of America to restore the economic growth affected during the previous crisis from the first half of the century, excessive distribution of credit, the use of complex financial instruments without having realistic image on the associated risks etc. Some authors also mention lack of economic cooperation between major countries (Report on the Financial Crisis, 2008, pp.3) [1]Thisturmoil in the most advanced financial markets was the consequence of an exceptional growth of credit, stimulated by a long period characterized by benign financial and economic conditions. During that period, there were extremely low real interest rates, whereas no liquidity problems existed, which raised the level of risk that creditors, investors and intermediaries were willing to take on. In conjunction with this, financial innovations expanded the system's capacity to generate credit assets and leverage but outpaced its capacity to manage the associated risks (Report of the Financial Stability Forum on Enhancing Market and Institutional Resilience, 2008,pp.5) [2]. A sophisticated and apparently stable system was established, which consisted in originating extremely complex financial instruments that allowed banks to offload risks (especially in the United States of America). These financial instruments were then distributed and bought - mostly in Europe, without paying proper attention to the underlying assets and the real economic fundament of these instruments (Report on the Financial Crisis, 2008, pp..3).The expansion of complex financial instruments was also encouraged by favourable credit ratings that implied assets were high-quality and low-risk. Financial guarantors contributed further to the perception that investment opportunities were unlimited and of high quality. As a consequence, the perceived liquidity of credit instruments increased. Additionally, several factors led to lowering the standards used in analyzing the eligibility of clients who wanted to benefit from the products of the financial institutions. Some of these factors were: relatively stable macroeconomic conditions, increased competitiveness among financial institutions, low interest rates, rising house prices, weak government oversight. …
Publication Year: 2013
Publication Date: 2013-01-01
Language: en
Type: article
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