Chapter 2: The Financial Crisis (original) (raw)
Related papers
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New Political Economy, 2010
Do we have a genuine global financial system? This article challenges the strong notion that the recent financial crisis was global in scope. It argues the international financial system is quite differentiated, being made up of domestic-national, supranational regional and international aspects. The system is characterised by contagion, however, and the article goes on to consider the role of this in generating spill-overs into the wider economic mechanism. Given this characterisation of the financial system the implications for how to organise a regulatory response are pursued. Here the argument is that the principle of 'distributed preparedness for resilience' should guide this response not a new set of top-down global rules and norms organised once again by the institutions of global economic governance.
The Financial Crisis - A Systemic Crisis Caused by Financialisation
The aim of this essay is to uncover the link between financialisation and the crisis, and discuss whether it represents a systemic failure or not. The main focus will be on the domestic changes occurring before 2007 in the US. Similar changes could be observed elsewhere in the developed world, and the analysis can easily be extended to other rich counties with only minor adjustments. The sovereign debt crisis and the related problems of the Euro are clearly related to some of the following analysis, but will not be discussed here.
2013
Until Lehman Brothers' bankruptcy in September 2008, the conventional wisdom was that the crisis was the result of problems in the financial sector. However, after the dramatic falls in industrial production in countries such as Japan and Germany starting in the last quarter of 2008, it became clear that the origins of the crisis were deeper. This paper argues that there was an economic crisis that was due to the bursting of a property and stock bubble in the US and a number of other countries. Just as in Japan in the 1990's, this greatly affected the real economy. The problems in the financial system were a symptom rather than a cause, but there was a strong feedback effect into the real economy. The structure of the global financial system and the nature of banking regulation have been severely inadequate. The paper suggests reforms in the structure of the IMF, the governance of central banks and the form of banking regulation. Resumen Antes de la quiebra de Lehman Brothers en septiembre del 2008, la sabiduría popular decía que la crisis se originaba en problemas en el sector financiero. Sin embargo, tras las drásticas caídas de la producción industrial en países como Japón y Alemania a partir del último trimestre de ese año, quedó claro que había que buscar más profundo. Este documento argumenta que hubo una crisis económica al explotar una burbuja inmobiliaria y accionaria en Estados Unidos y otros países. Al igual que en Japón en los noventa, los efectos en la economía real fueron enormes. Los problemas del sistema financiero fueron más un síntoma que una causa, aunque hubo una fuerte realimentación hacia la economía real. La estructura del sistema financiero global y la
ROLE OF FINANCIAL GLOBALIZATION IN THE GLOBAL FINANCIAL CRISIS Mahmut Unsal SASMAZ 2
2017
Financial globalization increased considerably as of breakup of Bretton Woods System in 1973. On one hand financial globalization has contributed to economic growth of the developed and the developing countries, on the other hand globalization of financial markets has increased the volatility in global financial markets and thus frequency and severity of financial crises. The United States subprime mortgage crisis of 2007 spread to the world through the securitized subprime mortgages and turned the global financial crisis in a little while. This study firstly examines development of financial globalization and then investigates the role of financial globalization in the global financial crisis. Financial globalization had a key role in the emergence and spread of global finance as well as management of the crisis.
Financial Crisis and the Threat to Globalisation (revised article)
This article falls under the remit of international political economy. It focuses on the banking crisis and implications for the international economy, multi-culturalism, and for the dismantling transnational agreements. It considers the uneven nature of the recovery, growth which has excluded large sections of the population leaving them disillusioned with globalisation and at austerity and the scapegoating of migrants blamed for exploiting generous welfare systems. The article considers 'bad trade deals' which leave domestic industries exposed to foreign producers not playing by the rules and at the encroaching cultural and economic isolationism as a threat to the global economy and relations between states.
Annals of the University of Oradea: Economic Science, 2009
The paper presents transformations that have occurred in the process of financial globalization on various countries and the role that credit plays in monetary policy.
Forthcoming in THE CONSEQUENCES OF THE GLOBAL FINANCIAL CRISIS
2012
All European member-states have been hit by the economic crisis, but some have been harder hit than others. The ‘liberal market economies’ (LMEs) of Anglophone countries, consisting of Britain and Ireland as well as the United States, long the darlings of the markets and the pundits, have this time been hardest hit, with their credit-fueled finance-driven model of growth having been at the heart of the crisis itself. The ‘coordinated market economies’ (CMEs) of Continental and Nordic Europe, encompassing Germany and the smaller European countries in these two regions, have in contrast seemingly sailed through, with their balanced model of export-fueled growth jeopardized mainly by the exposure of their banks to bad loans picked up in the LMEs. The other countries of Western Europe, generally left unlabeled by the Varieties of Capitalism school of political economy but which I call the ‘state-influenced market economies’ of Continental and Mediterranean Europe (SMEs) because of the d...
Lessons and Policy Implications from the Global Financial Crisis
The Evidence and Impact of Financial Globalization, 2013
The ongoing global financial crisis is rooted in a combination of factors common to previous financial crises and some new factors. The crisis has brought to light a number of deficiencies in financial regulation and architecture, particularly in the treatment of systemically important financial institutions, the assessments of systemic risks and vulnerabilities, and the resolution of financial institutions. The global nature of the financial crisis has made clear that financially integrated markets, while offering many benefits, can also pose significant risks, with large real economic consequences. Deep reforms are therefore needed to the international financial architecture to safeguard the stability of an increasingly financial integrated world.
Routledge eBooks, 2016
Until Lehman Brothers' bankruptcy in September 2008, the conventional wisdom was that the crisis was the result of problems in the financial sector. However, after the dramatic falls in industrial production in countries such as Japan and Germany starting in the last quarter of 2008, it became clear that the origins of the crisis were deeper. This paper argues that there was an economic crisis that was due to the bursting of a property and stock bubble in the US and a number of other countries. Just as in Japan in the 1990's, this greatly affected the real economy. The problems in the financial system were a symptom rather than a cause, but there was a strong feedback effect into the real economy. The structure of the global financial system and the nature of banking regulation have been severely inadequate. The paper suggests reforms in the structure of the IMF, the governance of central banks and the form of banking regulation. Resumen Antes de la quiebra de Lehman Brothers en septiembre del 2008, la sabiduría popular decía que la crisis se originaba en problemas en el sector financiero. Sin embargo, tras las drásticas caídas de la producción industrial en países como Japón y Alemania a partir del último trimestre de ese año, quedó claro que había que buscar más profundo. Este documento argumenta que hubo una crisis económica al explotar una burbuja inmobiliaria y accionaria en Estados Unidos y otros países. Al igual que en Japón en los noventa, los efectos en la economía real fueron enormes. Los problemas del sistema financiero fueron más un síntoma que una causa, aunque hubo una fuerte realimentación hacia la economía real. La estructura del sistema financiero global y la