Functional overview of financial crises development and propagation
AbstractThe U.S. sub-prime crise developed in the last few months as a dangerous syncope for the entire international financial system, recall for the rethinking of market functionality, revealing the international institutional weakness in financial system supervision on global scale. The mortgage volatility induced by the international dereglementation and derivates contemporary burst, correlated with a relaxed supervision framework, transformed progressively the credit market into a system “bubble”, making possible the distortion of real estates values toward those levels forced by creditors. Throughout a weakness chain, many financial institutions, determined by a savage competition on this sector, left away the prudence and borrowed money from different investors, guarantying the long terms transactions, with short time derivates from speculative short-term market, supplying the bubble. In this context, the paperwork is meant to recall for reinventing the risks models, so that the crises to be anticipated earlier than its development moment.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 18980.
Date of creation: 19 Jan 2009
Date of revision:
Publication status: Published in KBO Journal 1.1(2009): pp. 112-118
globalization; financial crise; global economy; monetary system; international management;
Other versions of this item:
- Popa, Catalin C., 2008. "A functional overview of financial crises development and propagation," MPRA Paper 13368, University Library of Munich, Germany.
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- F30 - International Economics - - International Finance - - - General
- G3 - Financial Economics - - Corporate Finance and Governance
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- Michel Aglietta, 2000. "The International Monetary Fund and the International Financial Architecture," Working Papers 2000-08, CEPII research center.
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