financial crisis

Examples of financial crisis in the following topics:

• The Financial Crisis of 2008

• The Financial Crisis of the 1930s

• The Federal Reserve and the Financial Crisis of 2008

  • The Fed responded to the financial crisis with conventional open market operations and unconventional credit facilities and bailouts.
  • In late 2007, the bursting of the U.S. housing bubble triggered the worst financial crisis since the Great Depression of the 1930s.
  • Further, this type of financial crisis meant that banks' assets were suddenly worth far less; open market operations can ensure that these banks have the liquidity they need to carry out their financial activities.
  • Others praise the Fed for avoiding an even deeper financial crisis.
  • Summarize the monetary policy tools used by the Federal Reserve in response to the financial crisis of 2008.

• Politics and the Great Recession of 2008

  • Global political instability is rising fast due to the global financial crisis and is creating new challenges that need to be managed.
  • This addition reflects the assessment of United States intelligence agencies that the global financial crisis presents a serious threat to international stability.
  • Several causes of the financial crisis have been proposed, with varying weights assigned by experts.
  • Research into the causes of the financial crisis has also focused on the role of interest rate spreads.
  • Prompted by the financial crisis in Latvia, the opposition and trade unions there organized a rally against the cabinet of premier Ivars Godmanis.

• Current Issues in Finance

  • Current issues in finance include the economic and regulatory impacts of the financial crisis and the growth of new types of finance.
  • The financial crisis of 2007–2008 caused the near-total collapse of many large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world.
  • The financial institution crisis hit its peak in late 2008.
  • It also led to a global recession and a sovereign debt crisis in Europe.
  • Critics of the financial crisis have argued that the regulatory framework did not keep pace with rapid innovation in financial markets and have asked for increased regulation and enforcement.

• Regulatory Oversight

  • Thus, one central bank cannot contain a financial crisis.
  • The United States and many countries were deregulating, when the 2008 Financial Crisis struck the world economy.
  • Toxic loans were called subprime loans before the financial crisis because banks earned enormous profits.
  • Effects of the 2008 Financial Crisis still plague the world's economy.
  • Thus, government regulations and regulatory differences among countries will diminish because governments want to avoid an economic crisis like the 2008 Financial Crisis.

• Bernanke Era

  • The Bernanke Era has included challenges faced by the Federal Reserve such as the financial crisis, strengthening federal policy, and reducing the deficit.
  • During his tenure as chairman, Bernanke has been responsible for overseeing the Federal Reserve's response to the financial crisis .
  • The main controversies surrounding Bernanke's terms as chairman include how he handled the financial crisis, particularly failing to see the crisis, for bailing out Wall Street, and for injecting $600 billion into the banking system to give the slow economic recovery a boost.
  • They stated that act of averting worse problems outweighed any responsibility that he had for the financial crisis.
  • Throughout his time as chairman, Bernanke has influenced the financial crisis, the Wall Street bailout, and the economic stimulus.

• The Financial Crisis

  • The 2008 global financial crisis was caused by widespread corporate fraud and risky loans and resulted in foreclosures, bank bailouts, and a global recession.
  • The 2007–2012 global financial crisis, also known as the 2008 financial crisis, is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s.
  • Although there have been extensive aftershocks, the financial crisis itself ended sometime between late-2008 and mid-2009.
  • Many causes for the financial crisis have been suggested, with varying weight assigned by experts.
  • In response to the financial crisis, both market-based and regulatory solutions have been implemented or are under consideration.

• Implications and Limitations of the Efficient Market Hypothesis

  • The financial crisis of 2007–2012 has led to renewed scrutiny and criticism of the hypothesis.
  • Market strategist Jeremy Grantham has stated flatly that the EMH is responsible for the current financial crisis, claiming that belief in the hypothesis caused financial leaders to have a "chronic underestimation of the dangers of asset bubbles breaking. " Noted financial journalist Roger Lowenstein blasted the theory, declaring "the upside of the current Great Recession is that it could drive a stake through the heart of the academic nostrum known as the Efficient-Market Hypothesis. " Former Federal Reserve chairman Paul Volcker chimed in, saying, "[it is] clear that among the causes of the recent financial crisis was an unjustified faith in rational expectations and market efficiencies. "
  • The financial crisis has led Richard Posner, a prominent judge, University of Chicago law professor, and innovator in the field of Law and Economics, to back away from the hypothesis and express some degree of belief in Keynesian economics.
  • Posner accused some of his Chicago School colleagues of being "asleep at the switch," claiming that "the movement to deregulate the financial industry went too far by exaggerating the resilience-- the self healing powers-- of laissez-faire capitalism. " Others, such as Fama himself, said that the hypothesis held up well during the crisis and that the markets were a casualty of the recession, not the cause of it.
  • The strong form of EMH is diminished by the 2008 crisis

• The Panic of 1857

  • The Panic of 1857 was a financial crisis in the United States caused by the overexpansion of the domestic economy.
  • The Panic of 1857 was a financial crisis in the United States caused by an overexpansion of the domestic economy following an international crisis over currency valuation in Britain.
  • It is considered by many to be the first worldwide financial crisis.
  • The failure of Ohio Life brought attention to the financial state of the railroad industry and land markets and brought the financial panic to the forefront of public issues.
  • Urban riots became common in the North and West as laborers and wealthier factions clashed over the financial crisis.