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The first global financial crisis of the 21st century: Introduction

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Author Info
Reinhart, Carmen

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Abstract

Global financial markets are showing strains on a scale and scope not witnessed in the past three-quarters of a century. What started with elevated losses on U.S.-subprime mortgages has spread beyond the borders of the United States and the confines of the mortgage market. Many risk spreads have ballooned, liquidity in some market segments has dried up, and large complex financial institutions have admitted significant losses. Bank runs are no longer the subject exclusively of history.These events have challenged policymakers, and the responses have varied across region. The European Central Bank has injected reserves in unprecedented volumes. The Bank of England participated in the bail-out and, ultimately, the nationalization of a depository, Northern Rock. The U.S. Federal Reserve has introduced a variety of new facilities and extended its support beyond the depository sector. These events have also challenged economists to explain why the crisis developed, how it is unfolding, and what can be done. This volume compiles contributions by leading economists in VoxEU over the past year that attempt to answer these questions. We have grouped these contributions into three sections corresponding to those three critical questions.

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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13288.

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Date of creation: Jul 2008
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Handle: RePEc:pra:mprapa:13288

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Related research
Keywords: financial crisis subprime mortgages monetary policy;

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Find related papers by JEL classification:
E0 - Macroeconomics and Monetary Economics - - General
F3 - International Economics - - International Finance

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  1. Kiyotaki, Nobuhiro & Moore, John, 1997. "Credit Cycles," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 211-48, April.
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