Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 7th International Conference on Economic Management and Green Development
Series Vol. 35 , 10 November 2023
Open
Access | Article
Global Financial Crisis and Risk Management
* Author to whom correspondence should be addressed.
Abstract
This paper explores the 2008 financial crisis. It looks at its causes, consequences, and the changes that were effected to prevent the global economy from a similar crisis in the future. The crisis began in the United States, spread quickly, and ended up affecting the global population’s jobs, homes, and savings. The paper identifies the Federal Reserve’s financial policies, subprime mortgages, and credit default swaps (CDS) as the main causes of the 2008 financial crisis – each of these factors played a significant part in leading to the crisis. The combination of these factors made the effects of the 2008 financial crisis even more severe, leading to a broader economic downturn. The consequences of the crisis included increased regulation of the financial industry, government intervention through bailouts, a decline in housing prices, higher unemployment rates, and the breakdown of significant several major banks and financial institutions. These consequences were severe and governments had to come up with solutions to prevent a similar happening in the future through measures like the Dodd-Frank Act and the Basel III framework.
Keywords
financial crisis, government intervention, banking regulation
References
1. Murphy, A.: An Analysis of the Financial Crisis of 2008: Causes and Solutions. SSRN (2008).
2. Lin, J. Y., & Treichel, V.: The unexpected global financial crisis: researching its root cause. World Bank Policy Research Working Paper (2012).
3. Sanders, A.: The subprime crisis and its role in the financial crisis. Journal of Housing Economics 17(4), 254–261 (2008).
4. Zahariev, A., Prodanov, S., Radulova, A., et al.: The Bank Insolvency: From Lehman Brothers to COVID-19. SSRN (2020).
5. Mayer, C. J., & Pence, K.: Subprime mortgages: what, where, and to whom? National Bureau of Economic Research (2008).
6. Gramlich, E. M.: Subprime mortgages: America's latest boom and bust. The Urban Institute (2007).
7. Weistroffer, C., Speyer, B., Kaiser, S., & Mayer, T.: Credit default swaps. Deutsche bank research (2009).
8. Augustin, P., Subrahmanyam, M. G., Tang, D. Y., & Wang, S. Q.: Credit default swaps: A survey. Foundations and Trends in Finance 9(1–2), 1-196 (2014).
9. Stulz, R. M.: Credit default swaps and the credit crisis. Journal of Economic Perspectives 24(1), 73-92 (2010).
10. Kohn, D. L.: The Federal Reserve’s Policy Actions during the Financial Crisis and Lessons for the Future. Board of Governors of the Federal Reserve System (2010).
11. Murdock, C. W.: The Dodd-Frank Wall Street reform and consumer protection act: What caused the financial crisis and will Dodd-Frank prevent future crises. SMUL Rev. 64, 1243 (2011).
12. King, P., & Tarbert, H.: Basel III: an overview. Banking & financial services policy report 30(5), 1-18 (2011).
13. Li, Y., Chen, Y. K., Chien, F. S., Lee, W. C., & Hsu, Y. C.: Study of optimal capital adequacy ratios. Journal of Productivity Analysis 45, 261-274 (2016).
14. Taskinsoy, J.: Rigorous Capital Requirements under Basel III: Possible impact on Turkey's financial sector. Journal of WEI Business and Economics (2013).
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).
- Volume Title
- Proceedings of the 7th International Conference on Economic Management and Green Development
- ISBN (Print)
- 978-1-83558-091-2
- ISBN (Online)
- 978-1-83558-092-9
- Published Date
- 10 November 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/35/20231732
- Copyright
- 10 November 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited