Explanation of Macroeconomics and its risks

In the field of economics, Macroeconomics is the major branch who deals with the performance and behavior of economy by focusing on aggregate changes like inflation, growth rate, gross domestic production and unemployment. It analyzes all the microeconomics factors and indicators that effect the government and help in implementing different strategies and policies for formulating the economy. The concept behind macroeconomics is generated when economy has to handle major issues of economy instead small matters which will coven in microeconomics. But many risks also attach with the macroeconomics which every economy has to face and settle down by implementing different policies and strategies.

In comparison of individual companies, macroeconomics handles the behavior and relationships of government and industries. Its basic purpose is to identify the political influence, trends and market volatility and their impact on economy and financial markets. Some types of macroeconomic risks are here that effect the financial sectors related to risk of economy that also influence the political, stock and economic risks which also effect the government are export, import, prices, inflation, or unemployment and many factors belong to market are company evaluation, assets and investments.

The financial risks are major part of macroeconomics that show the price trend in the market and their production requirement according to their demand and supply in the market. Basically the most important part of macroeconomics is to keep a balance state in the savings to investment. The prices of assets and remuneration risks are the basic mechanism that implements this equity.  If we talk about the bank relation and its participation in the macro economy then we see that this show a major impact on the industries. (ecb.europa.eu, 2008)

A bank who is not going to participate in the industry and development of economy more than its personal responsibility than many problems face by economy including many types of financial issues. Its basic purpose is to keep the money safe and secure of that persons who give their money to them and the second purpose is to secure their money in such a way to invest that amount in such a profitable purpose which give them long term benefit and also bank earn profit by utilizing the money of others. But if banks not utilize the money in such a beneficial way than the problems of economy related to financial issues, prices, productions and many other problems never going to resolve easily.

Banks participation of Macroeconomics and its risks:

Now we talk about that scenario when banks going to involve in different industries and specially government and then their participation in the economy and overcome the risks of economy. Banks going to involve with different industries as investor or become partner and give money to industries to run their business transactions in most effective manner. No any industry have too much amount to cover all its expenses and expanding its business to cover the problems of economy like unemployment or high prices , so in that case banks present their services that investment a major amount in such industries to cover many problems . (Keeton, 2008)

In other words, many banks now become part of industries and business at small and major level that support the industries in resolving all the financial matters and support its economy that never try to goes down their economy in any poor situations. Banks try to invest their entire amount in such projects which give them benefits in long terms and also beneficial for the economy and participate to resolve the risks of economy. Every person has to present their services to support the economy especially all major financial institutions. (Sumit Agarwala, 2009)

References of Macroeconomics and its risks:

Ecb.europa.eu. (2008, september 5). Risk and the Macro-economy. Retrieved from https://www.ecb.europa.eu/press/key/date/2008/html/sp080905.en.html

Keeton, W. R. (2008). The Transformation of Banking and Its Impact on Consumers and Small Businesses. Retrieved from https://pdfs.semanticscholar.org/0a7d/7ac388aa54733ec7e39fcf55c364ff341439.pdf

Sumit Agarwala, S. C. (2009, may). Benefits of Relationship Banking:. Retrieved from http://finance.wharton.upenn.edu/~souleles/research/papers/BankRelationship8j_050509.pdf