Why did the economic crisis happen?  Starting in the late 1990s, there was a broad credit bubble in the U.S. and Europe and a sustained housing bubble in the U.S.  With rising house prices and an poorly regulated primary mortgage market.  Led to an increase in non-traditional mortgages that were deceptive, in many cases confusing, and often impossible to pay back.  Failures in credit-rating and securitization transformed bad mortgages into toxic financial properties.

London Stock Exchange  Founded in 1668  Equity Markets: enabling companies from around the world to raise capital needed to grow by listing securities in a safe regulated market.  Trading Services: providing a fast and efficient trading platform, to be used by brokers and firms around the world to buy and sell securities.  Market Information Services: supplying high quality, real-time information and news to the financial community.  Derivatives: expanding to become the world's most efficient and liquid market for equity derivatives.

Facts and Figures  There are more than 500 firms worldwide that trade as members of the London Stock Exchange.  The LSE claims to be the most international of all stock exchanges, with companies from over 70 countries admitted to trading in their markets.  The exchange is arguably the largest stock market in Europe.  In October 2013, there were roughly 19 million trades, involving $216.9 billion (USD).  Approximately 2,733 companies are listed on the London Stock Exchange, with a total market value of $4.26 trillion (USD). (October 2013)

Financial Times Stock Exchange  FTSE 100 is an index of 100 most capitalised UK companies listed on the London Stock Exchange.  The index began on 3 rd Jan 1984 with a base level of 1000  The index is calculated and refreshed every 15 seconds.  The highest value any company has reach was in  The FTSE 100 is weighted by market capitalisation so the larger companies have a greater effect on the index than the smaller ones.

London Banks during the Crisis in 2008  All major Banks in the UK were affected, thus we had the bailouts.  A bailout is a term for giving a loan to a company or country which faces serious financial difficulty or bankruptcy.  A bank rescue package totalling some £500 billion was announced by the British Government on 8 October  The plan aimed to restore market confidence and help stabilise the British banking system, and provided for a range of short-term as well as up to £50 billion of state investment in the banks themselves.

UK Government Policy  Issue  The financial crisis of 2008 and 2009 exposed an unstable and unbalanced model of economic growth in the UK, which was based on unsustainable levels of public and private sector borrowing.  Rebalancing the economy is not about trading the success of one sector for another. It’s about spreading our success more evenly - both geographically and by sector - and supporting the world class industries we already have, as well as the new ones that we’re developing.  By reducing the deficit (the gap between what we spend and what we raise in taxes), we will put the public finances on a sustainable path again and help achieve balanced economic growth - helping keep interest payments lower for families, businesses and the taxpayer - meaning more jobs and greater prosperity.

Action  We are taking the following actions to reduce the deficit:  the Chancellor has set out tax and spending plans to 2015 to 2016, including action to drive out further efficiencies and to ensure that welfare remains affordable  Spending Round 2013 announced how £11.5 billion of savings will be made from day-to-day departmental spending in 2015 to 2016  at Autumn Statement 2013, we announced that government departmental budgets for 2014 to 2015 and 2015 to 2016 will be reduced by an additional 1.1%, not including protected departments, local government, security and intelligence agencies and HMRC.  To rebalance the economy:  we have developed a National Infrastructure Plan (Transport and connections), with investment in critical infrastructure projects as well as steps to attract major new private sector investment to the UK  we have set out a pipeline of infrastructure projects in Investing in Britain’s Future worth £100 billion over the next Parliament

Objectives  What was the cause for the economic crisis?  What is the London Stock Exchange?  What is the LSE used for?  How does the LSE allow companies to grow?  What is the FTSEE100?  What happened to the Banks in England?  What was necessary for the banks to survive?  What did the economic crisis uncover about the government policy?  What action is being implemented to recover from the economic crisis?