Język Polski
English
Published
:
2011-08-30
The Impact of the Current Economic Crisis on the Nature and Evolution Trends of the Global
Joanna Żabińska
Abstract
The financial crisis, which commenced with the collapse of the local property market in the US and spread like wildfire to overwhelm almost the entire financial system, caused the greatest recession since World War II. The bankruptcy of Lehmann Brothers was regarded by many as the pivotal point which ultimately unveiled loopholes in regulations, inadequate supervision, and faulty risk management. The depth and the global reach of the financial crisis helped politicians, economists and bankers understand the need to introduce reforms to the world's financial system that would embrace the globalization process and its upshot, such as e.g. an accelerated contagion effect: due to close links and interdependencies between markets, instruments and financial institutions, crisis impulses can advance rapidly and, in an instant, destabilize a substantial portion of the global financial system. The paper summarizes the known weaknesses of the existing financial system, at the micro- as well as macro-level, and describes the regulatory proposals by G20 countries, the Basel Committee and the Financial Stability Board addressing prudential procedures, supervision and systemic risk. Special attention is devoted to the operations of large banks and their far-reaching consequences. Ultimately, a position is taken vis-á-vis the financiers' long embedded belief that large banks cannot collapse because they are "too big to fall, too systemic to fail".(original abstract)Keywords:
Financial system, Financial crisis, Systemic risk, Financial institutions, G20 summitsMost read articles by the same author(s)
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Żabińska, J. (2011). The Impact of the Current Economic Crisis on the Nature and Evolution Trends of the Global. Zeszyty Naukowe Wyższej Szkoły Bankowej W Poznaniu, 35. Retrieved from https://journals.wsb.poznan.pl/index.php/znwsb/article/view/1426