Managing International Financial Crises: Responses, Lessons and Prevention

A decade has passed since the onset of the turmoil in 2007 that escalated into the global financial crisis. The crisis has posed new challenges to fiscal and monetary policies in all the countries, including the euro area. Managing financial crises includes measures that reduce their economic damage and costs. Numerous and creative monetary and fiscal policy or financial interventions have been deployed either in the European Union or in the US, China and Japan to mitigate the impacts of the crisis. This chapter gives an overview, assessment and a short comparison of the responses. It also deals with the lessons that may prevent such an intense shock in the future. The prevention implies financial regulations, the reform of the global financial system to become more resilient and the changes that have reshaped the role of central banks.