International Monetary Law: Issues for the New Millenium. Edited by Mario Giovanoli. [Oxford: Oxford University Press. 2000. li, 515 and (Index) 22 pp. Hardback. £125 net. ISBN 0–19–829923–0.]

2002 ◽  
Vol 61 (3) ◽  
pp. 715-738
Author(s):  
Kern Alexander
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Interest Rates ◽  
Financial Crises ◽  
Current System ◽  
Banking Crisis ◽  
Oxford University ◽  
Speculative Attack ◽  
International Financial Architecture ◽  
The Government

The financial crises that spread through East Asia, Russia and Latin America in the late 1990s have led to renewed calls for reform of the “international financial architecture” that would involve legal and institutional changes for the regulation of international financial markets. Since the end of the Bretton Woods system in the early 1970s, there have been over 100 financial crises while 132 of the 184 members of the International Monetary Fund have suffered varying degrees of banking fragility and distress. Although the term “banking crisis” and “financial crisis” are often used interchangeably, the IMF defines a financial crisis as a currency crisis, which is a speculative attack on the currency either causing a devaluation or forcing the authorities to spend large amounts of foreign exchange reserves to purchase its currency or to raise interest rates sharply. A banking crisis refers to actual or potential bank runs or failures, which induce banks to suspend the internal convertibility of their liabilities or to compel the government to intervene. Financial and banking crises often have systemic consequences, impairing markets’ ability to function effectively and may have major adverse effects on the economy. Many experts agree that adequate regulation at the domestic and international levels has not accompanied the progressive liberalisation of financial markets and, in particular, of short-term capital flows. It is a serious defect with the current system that the development of international monetary and financial law—at least in the areas of regulation and supervision—has only occurred haphazardly and principally as a result of a series of financial crises that began in the mid 1970s. Indeed, this book is a welcomed contribution to understanding many of the complex issues that arise in international monetary and financial law.

scholarly journals THE GLOBAL FINANCIAL CRISES AND THEIR TYPES

2015 ◽  
pp. 271-277
Author(s):  
E. V. Vasina
Keyword(s):  
Financial Crisis ◽  
Interest Rates ◽  
Financial Crises ◽  
Debt Crisis ◽  
Currency Crisis ◽  
Banking Crisis ◽  
Real Economy ◽  
International Financial Crises ◽  
Markets And Institutions ◽  
Asset Class

In this study the author reveals the essence of the financial crisis and examines the various types of financial crises. By studying the literature on financial crises, the author of the studypays attention to three specific areas: the definition of the crisis, the manifestations of the crisis and the types of financial crises. The article notes that the term "financial crisis" is widely used in a variety of situations in which some financial assets suddenly lose most of their nominal value, but it does not necessarily lead to changes in the real economy. The financial crisis is a crisis that is systematically covers financial markets and institutions of the financial sector, international finance, money circulation and credit, state, municipal and corporate finance. Financial crises have common elements, but they come in different forms. Financial crises are generally multidimensional events and are difficult to characterize using a single indicator. The author considers the following types of financial crises: a banking crisis, a currency crisis, speculative bubbles and international financial crises. Banking crisis is a situation when a bank faces with a sudden outflow of depositors' funds. A currency crisis is a situation when the exchange rate, which is pegged to the currency of another country, is on the verge of collapse, causing committed speculation. A speculative bubble is in the case of large, sustainable overpricing of any asset class. Financial crises are reflected in a sharp rise in interest rates, a collapse in exchange rates, massive withdrawal of deposits from banks and credit crunch, currency and debt crisis.

scholarly journals The Effect of FOMC Votes on Financial Markets

2019 ◽  
Vol 101 (5) ◽  
pp. 921-932
Author(s):  
Carlos Madeira ◽  
João Madeira
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Financial Markets ◽  
Interest Rates ◽  
Stock Prices ◽  
Open Market ◽  
Federal Open Market Committee ◽  
2008 Financial Crisis ◽  
Treasury Securities ◽  
Stock Market Reaction

This paper shows that since votes of members of the Federal Open Market Committee have been included in press statements, stock prices increase after the announcement when votes are unanimous but fall when dissent (which typically is due to preference for higher interest rates) occurs. This pattern started prior to the 2007–2008 financial crisis. The differences in stock market reaction between unanimity and dissent remain, even controlling for the stance of monetary policy and consecutive dissent. Statement semantics also do not seem to explain the documented effect. We find no differences between unanimity and dissent with respect to impact on market risk and Treasury securities.

Dating Banking and Currency Crises in Turkey, 1990-2014

2016 ◽  
pp. 240-273
Author(s):  
Ali Ari ◽  
Raif Cergibozan ◽  
Sedat Demir
Keyword(s):  
Financial Crisis ◽  
Financial Crises ◽  
Early Warning System ◽  
Currency Crises ◽  
Global Financial Crisis ◽  
Empirical Studies ◽  
Banking Crisis ◽  
Warning System ◽  
Turkish Economy ◽  
The Global Financial Crisis

The last two decades characterized by financial crisis episodes have seen a proliferation of empirical studies. These early warning system models allowed researchers to distinguish certain key determinants of financial crises, and helped predicting and preventing the occurrence of some crises. However, crises continue to arise as recently illustrated by the onset of the global financial crisis. This clarifies that there are still a lot to learn about financial crises. In this sense, this paper aimed to compare the performance of several currency and banking crisis indicators within the Turkish economy which underwent severe financial crises in the last twenty years. Different currency crisis indicators performed well by detecting the 1994, 2001 and 2008 currency crises, while banking crisis indicators had significant inconsistencies. However, two banking crisis indicators we developed stand for valuable efforts in dating banking crises by constructing aggregate indexes, and contribute significantly to the empirical crisis literature.

Lässt sich die Geldschöpfung der Geschäftsbanken noch kontrollieren? – Geldpolitik seit der jüngsten Finanzkrise 2007/2008

2018 ◽  
Vol 87 (3) ◽  
pp. 47-63
Author(s):  
Mathias Binswanger
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Interest Rates ◽  
Financial Crises ◽  
Commercial Banks ◽  
Central Banks ◽  
The Past ◽  
Monetary Authorities ◽  
Money Creation ◽  
Recent Financial Crisis

Zusammenfassung: Als Folge der jüngsten Finanzkrise ist der Einfluss der Zentralbanken auf die Geldschöpfung weitgehend verloren gegangen. Denn die Kontrolle über Reserven funktioniert nur solange, wie diese knapp sind und deren Bezug an bestimmte Bedingungen geknüpft werden kann. Seither halten die Geschäftsbanken in den ökonomisch wichtigsten Ländern de facto dermaßen viele Reserven, dass sie nicht mehr auf die jeweilige Zentralbank angewiesen sind. Diese Entwicklung lässt sich sowohl für die FED als auch für die EZB aufzeigen. Dies führt zu geldpolitisch neuen Herausforderungen, die bisher kaum beachtet wurden. Die Einflussmöglichkeit der Zentralbanken auf den Geldschöpfungsprozess der Geschäftsbanken wurde noch nie in so großem Stil ausgehebelt. Deshalb müssen Zentralbanken in Zukunft ihr Repertoire an geldpolitischen Massnahmen erweitern. Nur mit dem Drehen an der Zinsschraube wird man den Geldschöpfungsprozess in Zukunft kaum mehr in gewünschter Weise beeinflussen können. Summary: As a result of the recent financial crisis, the influence of central banks on money creation has largely disappeared. Controlling this process only works as long as money creation of commercial banks also leads to a need for additional reserves from the central bank. However, the large asset purchase programs of monetary authorities after the financial crises resulted in an enormous increase in reserves at commercial banks. Therefore, commercial banks have enough reserves to create additional money at large amounts and do not depend on central banks any more. This development is indicative for both the FED and the ECB. Therefore central banks face the challenge how they can restore their influence on the process of money creation. Just lowering or increasing interest rates, which was the major way of conducting monetary policy in the past, will not work anymore in the future.

Global Financial Crisis: Exploring the Special Role of U.S. Banks and Regulations

2016 ◽  
Vol 4 (1) ◽  
Author(s):  
Nabila Nisha
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Special Role ◽  
Subprime Lending ◽  
International Banking ◽  
The Government ◽  
The Global Financial Crisis

Financial markets have suffered the greatest dislocation following the truly seismic significance of the global financial crisis. Regulators argue that the banking sector played a particularly special role in triggering the causes of the subprime debacle, thereby leading to the occurrence of the global financial crisis. Banks previously functioned as only a financial intermediary, but certain developments in the international banking sector like deregulation, technological progress, consolidation and competition, securitisation and financial innovation, resulted in banks being involved in subprime lending activities and hence, a reason behind the financial turmoil. The aim of this paper is to scrutinise the special role of banks in the global financial crisis and to stress on the need for increased regulation and their implications on the banking sector. The current study will thus contribute to the examination of the salient features of the global financial crisis and provide regulatory suggestions for the banking sector and the government as a whole.

Strategic and Innovative Actions of the Government During the Financial Crisis

2019 ◽  
pp. 352-370 ◽  
Author(s):  
Seçil Şenel
Keyword(s):  
Financial Crisis ◽  
Economic Crisis ◽  
Financial Crises ◽  
Social Problems ◽  
Government Intervention ◽  
Crisis Period ◽  
Mortgage Crisis ◽  
Economic Depression ◽  
The Government

Financial crises cause significant economic and social problems for the countries. Many companies stop their operations and a lot of people lose their jobs. Especially after the globalization, there is an increase in the number of financial crises. Because of this aspect, governments try to implement necessary actions to prevent the crisis. In this scope, government intervention to the market during the crisis period is a much-debated concept. The aim of this chapter is to identify the success of government intervention in the market in crisis period. For this purpose, three different financial crises are analyzed, which are 1929 Economic Depression, 2001 Turkish Economic Crisis, and 2008 Global Mortgage Crisis. As a result, it is identified that when government intervene into the market in crisis period, the countries can much easily overcome the crisis. Therefore, it is recommended that strategic and innovative actions should be taken by the government in case of economic crisis, such as increasing liquidity level and implementing new regulations.

scholarly journals From Orthodoxy to Heterodoxy: Financial Crisis Literature Compared

2016 ◽  
Vol 63 (s1) ◽  
pp. 71-87
Author(s):  
Ignacio Martínez ◽  
Gabriel Mursa
Keyword(s):  
Financial Crisis ◽  
Business Cycle ◽  
Financial Markets ◽  
Financial Crises ◽  
Financial Instability ◽  
Business Cycle Theory ◽  
Economic Cycle ◽  
Austrian Business Cycle Theory ◽  
Economic Downturns ◽  
Austrian Business Cycle

Abstract In this paper we’ll attempt to explain the connection between interventionism in financial markets, financial crises and economic downturns, as the main cause of the financial crisis mainstream models; As well as the connection between the theories of Austrian and Minsky’s economic cycle as branches of heterodox economic theory. In order to achieve this target, we’ll begin with a brief introduction of mainstream financial crises models in the orthodox economic literature, then we’ll examine the statements of the Austrian Business Cycle Theory and the Financial Instability Hypothesis, and evaluate whether a connection between the two. We conclude that Financial Instability Hypothesis can be studied as a particular case of the Austrian Business Cycle Theory.

scholarly journals Reform of key interest rates on the money market and some implications for credit markets

2021 ◽  
Vol 3 (2) ◽  
pp. 189-199
Author(s):  
Đorđe Đukić
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Interest Rates ◽  
Global Financial Crisis ◽  
Banking Industry ◽  
Credit Markets ◽  
Money Market ◽  
Mortgage Markets ◽  
Significant Events ◽  
The World

Ongoing reform of key interest rates on the money market is one of the most significant events on financial markets in the world. This is due to the fact that most of the LIBOR rates in different currencies will be discontinued at the end of 2021. Cessation of LIBOR after a number of scandals following emerging global financial crisis in 2008 lead to existence of more benchmark rates constructed as risk-free rates based on transactions, from SOFR in the U.S.A. to SARON in Switzerland. Intention of EU regulators is to replace EURIBOR with ESTR in the future so that ESTR becomes benchmark for EU and EFTA. The last analysis of lenders and borrowers' positions indicates that EURIBOR is satisfactory reformed based on the fact that in its determination data about transaction and expert judgment are included. According to the current prevailed thinking in the banking industry EURIBOR could be continually used. True, not necessarily on the derivatives market, but certainly on the credit and mortgage markets which are particularly related to EURIBOR in eurozone.

High US government debt does not itself raise risks

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Financial Markets ◽  
Interest Rates ◽  
Federal Reserve ◽  
Government Debt ◽  
Business Investment ◽  
Content Type ◽  
Us Government ◽  
Deficit Spending ◽  
The Government

Significance Some economists are suggesting that, over the longer term, this could cause financial markets to stop buying US debt and charge prohibitively high rates, and cause the dollar to crash. Other economists argue that more deficit spending could fuel output and so keep relative debt levels in check. Impacts The government retirement trust funds will continue to be major buyers of government debt. In the recovery and beyond, financing the debt could raise private borrowing costs, reduce business investment and slow economic growth. High and rising debt might constrain policymakers in their ability to respond to unforeseen events. A higher debt path that boosts interest rates would give the Federal Reserve more flexibility in implementing monetary policy.

Central-Bank ‘Distress’ and Hyperinflation in Argentina, 1989–90

1995 ◽  
Vol 27 (3) ◽  
pp. 663-682 ◽  
Author(s):  
Paul Beckerman
Keyword(s):  
Exchange Rate ◽  
Public Sector ◽  
Central Bank ◽  
Financial Markets ◽  
Interest Rates ◽  
Monetary Policies ◽  
The Public ◽  
Domestic Debt ◽  
Outstanding Debt ◽  
The Government

AbstractThe essential explanation of Argentina's 1989 hyperinflations is that the stabilisation programmes immediately preceding them drove the public sector in particular, the central bank – into ‘debt distress.’ These stabilisation programmes sought to anchor prices on an appreciated exchange rate, sustained by tight monetary policies that maintained high interest rates. The problem was that the government and the central bank had heavy domestic-debt burdens, and their combined interest bill far exceeded their non-interest surplus. To finance the interest without creating money, the government and central bank had to add continually to the outstanding debt stock as they capitalised the interest due. The debt swelled, and interest rates were pressured upward. Heavy pressure against the exchange rate, devaluation and hyperinflation then ensued when the public-sector debt stock exceeded what financial markets could be persuaded to hold at reasonable interest rates.

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