The Financial Crisis of 2008

2021 ◽  
Author(s):  
Barrie A. Wigmore
Keyword(s):  
Financial Crisis ◽  
Portfolio Management ◽  
Institutional Investors ◽  
Financial Crises ◽  
Critical Analysis ◽  
Good Picture ◽  
History Of ◽  
Asset Classes ◽  
The 2008 Financial Crisis ◽  
Comprehensive History

Supported by ten years of research, Wigmore has gathered extensive data covering the 2008 financial crisis and subsequent recovery to provide the first comprehensive history of the period. Financial crises cannot occur unless institutional investors finance the bubbles that created them. Wigmore follows the trail of data putting pressure on institutional investors to achieve higher levels of returns that led to over-leverage throughout the financial system and placed such a burden on recovery. Here is a 'very good picture - and painful reminder - of the crisis' evolution across multiple asset classes, structures, participants, and geographies.' This work serves as a critical analysis of modern portfolio management and an important reference work for financial professionals, academics, investors, and students.

scholarly journals EFFECTIVENESS OF EARLY WARNING MODELS: A CRITICAL REVIEW AND NEW AGENDA FOR FUTURE DIRECTION

2019 ◽  
Vol 22 (4) ◽  
pp. 457-484
Author(s):  
Rakesh Padhan ◽  
K. P. Prabheesh
Keyword(s):  
Financial Crisis ◽  
Early Warning ◽  
Financial Crises ◽  
Global Financial Crisis ◽  
Dynamic Nature ◽  
Explanatory Variables ◽  
History Of ◽  
Central Argument ◽  
Future Direction ◽  
The Global Financial Crisis

This paper suggests a new agenda for constructing early warning models (EWMs) toenhance their effectiveness in predicting financial crises. The central argument of thenew agenda aims to eradicate the weaknesses of existing EWMs, since their failure topredict the global financial crisis of 2007–2008 demonstrates the need to improve theirefficiency. We document the history of EWMs and propose a new agenda as follows:1) the accurate measurement of a financial crisis, 2) implementation of a fourthgenerationcrisis model to capture the dynamic nature of the financial crisis, and 3) theinclusion of interconnectedness/contagion variables as explanatory variables for thefinancial crisis.

Do Institutional Investors Know Banks Better? Evidence From Institutional Trading Surrounding the 2008 Financial Crisis

2019 ◽  
Vol 35 (4) ◽  
pp. 777-802
Author(s):  
Wei-Ling Song ◽  
Hui (Hillary) Wang
Keyword(s):  
Financial Crisis ◽  
Institutional Investors ◽  
Abnormal Returns ◽  
Insurance Companies ◽  
Economic Damage ◽  
Institutional Trading ◽  
2008 Financial Crisis ◽  
High Exposure ◽  
Market Participants ◽  
The 2008 Financial Crisis

The catastrophic economic damage caused by the 2008 financial crisis was unprecedented and caught many market participants by surprise. It raises the question: To what extent do institutional investors play a monitoring role in the banking industry? In this article, we investigate this underresearched area and provide evidence that gray institutions (i.e., banks and insurance companies) have more information about banks’ risk exposure to securitization than independent institutions do (e.g., investment companies and public pension funds) as gray institutions shied away from banks holding more private-label mortgage-backed securities or issuing riskier securitization deals before the crisis. We also find that the trading of gray institutions before the crisis can predict high-exposure banks’ abnormal returns around the Lehman Bankruptcy and subsequent 1-year stock performance. The trades of gray institutions are also significant and positively related to such banks’ operating performance during the crisis period.

scholarly journals King’s Model on Capitalization under Basel III: The Case of Lebanese Banks

2018 ◽  
Vol 4 (1) ◽  
pp. 77-94
Author(s):  
Nabil Georges Badr ◽  
Somaya Nasif El Ahmadieh
Keyword(s):  
Financial Crisis ◽  
Financial Crises ◽  
Commercial Banks ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Capital Inflows ◽  
Basel Iii ◽  
Spread Ratio ◽  
The 2008 Financial Crisis ◽  
The Impact

Objective: Lebanese banks have shown immunity towards the 2008 financial crisis that was attributed to many factors including a strong regulatory and supervisory system of conservative practices and structural economic factors such as the recurrence and non-speculative nature of capital inflows towards Lebanon supported by a large pool of offshore savings from diaspora and investors around the globe. The purpose of this study is to investigate the relation between capital adequacy ratios (CARs) and lending spread ratio (LSR). This paper presents the first assessment of the Basel III capital requirements on lending spread ratio before, during and after the financial crisis among commercial banks operated in Lebanon. Methodology: We consider King’s approach and assess his model’s applicability in the Lebanese context. Findings indicate some deviations, specifically related to the practices and financial performance of commercial banks in Lebanon. Results: We found no indication of impact of the change in CAR on LSR among Lebanese commercial banks in years prior to the recent financial crises; Nevertheless, the impact of changing CAR by 1 pp on LSR has a modest effect on Lebanese commercial banks during the years of financial crises; this effect is lowered to become modest after the crisis. Implication: The results of the current study reveal significant implications for managers in commercial banks in particular and all banks in general. Given that Lebanese commercial banks are well-capitalized and their Capital Adequacy Ratios are above international benchmarks, bank managers must carefully monitor the cost of the implementation of Basel III requirements

scholarly journals Financial Crises in State Owned and Private Commercial Banks in Bangladesh: A Comparative Analysis

2019 ◽  
Vol 9 (2) ◽  
pp. 146
Author(s):  
Kawsar Jahan ◽  
Mohammod Akbar Kabir ◽  
Farjana Nur Saima ◽  
Md. Nasim Adnan
Keyword(s):  
Financial Crisis ◽  
Financial Crises ◽  
Commercial Banks ◽  
Banking Sector ◽  
Stock Exchange ◽  
Least Square ◽  
Z Score ◽  
Ordinary Least Square ◽  
History Of ◽  
Score Model

Recently the performance of banking industry is one of the much talked issues in the history of Bangladesh. Predicting the factors of financial crises in banks is very much important as this sector is facing a crises moment now. This study examined the driving factors of financial crises in banking sector using panel data consisted of five year observations (2012-2016) for each of 28 PCBs listed in Dhaka Stock Exchange (DSE) and 6 State-Owned Commercial Banks (SCBs). Financial crisis is measured by Altman’s Z-score and Pooled Ordinary Least Square (Pooled OLS) has been applied to find out the factors necessary to condense financial crisis in banks.The study found that SCBs and listed PCBs in Bangladesh are facing financial crisis on the basis of Altman’s Z-score model. Results of the analysis postulated that CRAR, NIIR and NINTR significantly contribute to lessen financial crisis in listed PCBs and also in SCBs. Therefore, the study suggests the regulatory authorities, including stakeholders and researchers to taking into account the findings of the study and to be more alert of the operations of SCBs and PCBs in order to steps forward the performance of this sector as well development of the country in the coming future.

Robert Skidelsky Money and Government: The Past and Future of Economics

2020 ◽  
Vol 94 (1) ◽  
pp. 257-261
Author(s):  
Hugh Rockoff
Keyword(s):  
Financial Crisis ◽  
London School ◽  
Bottom Line ◽  
2008 Financial Crisis ◽  
John Maynard Keynes ◽  
The Past ◽  
History Of ◽  
The 2008 Financial Crisis ◽  
London School Of Economics

Robert Skidelsky, a historian whose fame for his monumental biography of John Maynard Keynes is well deserved, here provides us with a brilliant, well-informed history of macroeconomics stretching from the “British recoinage debates” of the 1690s to today. Money and Government was prompted by the 2008 financial crisis. It is an attempt, Skidelsky tells us, to answer the question that Queen Elizabeth II posed to a group of economists at the London School of Economics in October 2008: “Why did no one see it coming?” Not surprisingly, to skip to the bottom line, Skidelsky believes that macroeconomics reached its apogee with Keynes and that it has been more or less downhill from there. The 2008 financial crisis could have been predicted, and ameliorated after it occurred if not prevented, if macroeconomists had remained loyal to Keynes.

Coda

2020 ◽  
pp. 265-266
Author(s):  
Peter H. Christensen
Keyword(s):  
New York ◽  
Financial Crisis ◽  
New York Times ◽  
2008 Financial Crisis ◽  
History Of ◽  
Local Officials ◽  
Economic Health ◽  
The 2008 Financial Crisis

This chapter mentions Nicolai Ouroussoff, former architecture critic for the New York Times, who published an editorial entitled “Saving Buffalo's Untold Beauty” at the peak of the 2008 financial crisis. It discusses how Ouroussoff depicted Buffalo as a place replete with architectural treasures and a history of experimentation that was in outsize proportion to its population, economic health, and the resources of its preservationists. It also examines Ouroussoff's article delighted many local officials and cemented some of the very clichés that have trapped Buffalo in a fugue of “ruin porn.” The chapter points out how Buffalo ardently remains a dynamic city that neither begs pity nor romance from its inhabitants. It highlights Buffalo's traits of being quotidian, emblematic, and archetypal as part of a larger effort to move beyond facile depictions of Buffalo and show how its lessons are transposable by being allegorical.

scholarly journals The Relationship Between Accounting Practices and Effects of Financial Crisis in Turkey: A Case Study on an Oil Company

2016 ◽  
Vol 6 (1) ◽  
pp. 47-58 ◽  
Author(s):  
İsmail Erkan Çelik
Keyword(s):  
Financial Crisis ◽  
Financial Crises ◽  
Negative Effects ◽  
Mortgage Loans ◽  
Financial Reports ◽  
Subprime Mortgage ◽  
Before And After ◽  
Accounting Rules ◽  
The 2008 Financial Crisis ◽  
Audit Reports

Many reasons lie at the base of all financial crises from the past to the present. If we take into consideration the 2008 subprime mortgage crisis, the only reason cannot be mortgage loans. But the mortgage issue continued to advance and created several other problems. Definitely, the source of mortgage loans problem also had many roots. One of the reasons was the lack of correct use of accounting principles and auditing. This is a strong proof and indicator that, there are many accounting based reasons behind the occurrence of the financial crises. Many examples can be given showing moving away from the basic principles of accounting rules and the general accounting concepts. Moreover, institutions being not fully independent, running creative accounting practices, having problems with fair valuation and transparency issues, presenting unreal financial reports, and sharing misleading audit reports are all related to financial crises.Furthermore, specific businesses and people abuse accounting rules, standards and related legislation for the sake of their own interests. Accounting and finance history has shown us that, even audit institutions, credit institutions and rating agencies are getting unfair advantages and generating unethical cash by making intentional accounting and finance errors, which is actually categorized as fraud.The aim of this study is to analyze financial crises and to determine if accounting practices have any relationship with financial crises. The research investigated an oil company’s financial and operational indicators before and after the 2008 financial crises with related tables and figures. Also, an interview was run with the company’s accounting officer. Based on the statements of firm’s accounting officer, correct accounting practices defended firm from several negative effects of the 2008 financial crisis.

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