Strategic issues in banking and insurance Essay

Strategic issues in banking and insurance - Essay ExampleIn developed world where approximately of the sector is de-regulated and enjoy substantial degree of freedom and autonomy, political act upons may not be in that respect however, in developing countries, this may not be the case. Developing countries do not have rattling well gr give financial sector and most of the institutions are either directly owned or controlled by the government themselves or governments have the substantial share in them. This allows the government to largely influence the banks especially to engage into practices which may not be in direct elicit of the deposit holders of those banks.The eon after 9/11 have seen a new shift into the industry in toll of influence of political forces on it. The anti- funds laundering rules, terrorist funding etc were some of the key strategic issues which put particular(a) pressures on the banks and insurance companies to devise methods and strategies which can effectively help in tackling issues like illegal money laundering, channeling of funds through SWIFT etc to the supposedly terrorist organizations etc.The current economic trends especially the crisis emerged due to the subprime mortgages is considered in a flash as one of the great strategic challenge faced by most of the players in the financial sector industry. Subprime mortgages are considered as the threat which has largely been created by the banks themselves as they tend to violate their own prudent lending policies in order to capture the market. This has therefore provided them an opportunity to earn at the cost of incurring high cost. Sub-Prime lending typically has been characterized as lending at relatively costly interest rates and fees to credit impaired or otherwise high risk borrowers. (Lax, Manti and Raca). Subprime loans are among the newly pop mortgage products, such as interest-only loans, for people with strained budgets, including first-time buyers. Homeowne rs increasingly use them to refinance and consolidate rest home debts