The global financial crisis reveals consolidation and guarantees to be key issues for financial sustainability

2014 ◽  
Vol 26 (1) ◽  
pp. 165-180 ◽  
Author(s):  
Andreas Bergmann
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Accounting Standards ◽  
Financial Sustainability ◽  
Government Interventions ◽  
Key Issues ◽  
The Global Financial Crisis

This paper investigates the accounting and reporting of government interventions during the most recent global financial crisis. It shows that governments do not report all their interventions as required by accounting standards. The incompleteness of information may systematically lead to erroneous decisions and therefore jeopardize financial sustainability. Particularly relevant are shortcomings in the field of consolidation and the presentation of financial guarantees.

Crisis and organizational change: IASB’s response to the financial crisis

2019 ◽  
Vol 15 (2) ◽  
pp. 278-301 ◽  
Author(s):  
Masaki Kusano ◽  
Masatsugu Sanada
Keyword(s):  
Organizational Change ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Accounting Standards ◽  
Governance Structure ◽  
Historical Narrative ◽  
Causal Mechanism ◽  
Thick Description ◽  
Content Type ◽  
The Global Financial Crisis

Purpose The purpose of this study is to examine the International Accounting Standards Board (IASB)’s response to criticism and political pressure at the time of the global financial crisis through the lens of legitimacy theory. Design/methodology/approach This study constructs a thick description about a causal mechanism between social crisis and organizational change using a process-tracing approach that combines a historical narrative and a theoretical consideration. Findings The IASB faced criticism of its accounting standards for financial instruments and its governance structure during the financial crisis. This criticism represented the crises of pragmatic and cultural legitimacy. Facing these legitimacy crises, the IASB adopted such legitimation strategies as normalization and restructuring to repair its legitimacy. Additionally, in these repairing processes, the IASB, as a bonus, became institutionally embedded itself in the global political arena and succeeded to strengthen its legitimacy. Originality/value The study suggests that the financial crisis had a significant impact on the standardization of transnational accounting. Indeed, the crisis was an important turning point of the IASB’s work on revising its accounting standards to reduce complexity and altering its Constitution. Moreover, the authors bridge the gaps in the literature on accounting and legitimacy by examining how the IASB used particular legitimacy repair strategies when facing its legitimacy crises

scholarly journals Over the Cliff: From the Subprime to the Global Financial Crisis

2011 ◽  
Vol 25 (1) ◽  
pp. 49-70 ◽  
Author(s):  
Frederic S Mishkin
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Financial System ◽  
The United States ◽  
Investment Bank ◽  
Government Interventions ◽  
Troubled Asset Relief Program ◽  
The Government ◽  
The Global Financial Crisis ◽  
Relief Program

The financial crisis of 2007 to 2009 can be divided into two distinct phases. The first and more limited phase from August 2007 to August 2008 stemmed from losses in one relatively small segment of the U.S. financial system—namely, subprime residential mortgages. Despite this disruption to financial markets, real GDP in the United States continued to rise into the second quarter of 2008, and forecasters were predicting only a mild recession. In mid-September 2008, however, the financial crisis entered a far more virulent phase. In rapid succession, the investment bank Lehman Brothers entered bankruptcy on September 15, 2008; the insurance firm AIG collapsed on September 16, 2008; there was a run on the Reserve Primary Fund money market fund on the same day; and the highly publicized struggle to pass the Troubled Asset Relief Program (TARP) began. How did something that appeared in mid-2008 to be a significant but fairly mild financial disruption transform into a full-fledged global financial crisis? What caused this transformation? Did the government responses to the global financial crisis help avoid a worldwide depression? What challenges do these government interventions raise for the world financial system and the economy going forward?

scholarly journals Linking Evaluation and Spending Reviews: Challenges and Prospects

2018 ◽  
Vol 32 (3) ◽  
Author(s):  
Jim McDavid ◽  
Astrid Brousselle ◽  
Robert P. Shepherd ◽  
David Zussman
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Government Interventions ◽  
Widespread Adoption ◽  
The Global Financial Crisis

The global financial crisis in 2008 was a significant watershed for governments everywhere. Diminished prospects for growth coupled with continuing demands for government interventions and chronic constraints on resources, prompted in part by the widespread adoption of variants of neo-liberalism (constrain resources to limit spending and shrink governments), have created fiscal environments where rationing expenditures among programs and policies is chronic and even acute.

scholarly journals Fiscal Challenges After the Global Financial Crisis: A Survey of Key Issues

2014 ◽  
Vol 05 (02) ◽  
pp. 1450004 ◽  
Author(s):  
Augusto Lopez-Claros
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Planning Horizon ◽  
Fiscal Policies ◽  
The Past ◽  
Fiscal Management ◽  
Fiscal Planning ◽  
Key Issues ◽  
The Global Financial Crisis

The global financial crisis and the response to it have contributed to a sharp increase in public indebtedness in a large number of countries. While there have been episodes of high debt in the past, there are a number of long-term challenges today that are likely to complicate the implementation of sustainable fiscal policies in the coming years. Population ageing and climate change are factors that are likely to contribute to rising fiscal pressures and the crisis has highlighted the risks and vulnerabilities stemming from reduced fiscal space. This paper argues that heightened fiscal challenges can only be dealt successfully by adopting a long-term fiscal planning horizon. The paper analyzes a range of available policy tools that countries have used in the past to improve fiscal management.

The complex and covert web of financial protectionism

2014 ◽  
Vol 16 (4) ◽  
pp. 579-613 ◽  
Author(s):  
Kevin Young
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Government Interventions ◽  
Crisis Type ◽  
The 2008 Financial Crisis ◽  
Using Data ◽  
The Global Financial Crisis ◽  
Type 3

In the wake of the 2008 financial crisis, governments turned to protectionist policies to support their financial sectors. Yet these policy choices have been highly variegated, and like many recent protectionist policies reflect a process of adaptation to changing circumstances. Using data on a variety of government interventions in the financial sector since the crisis, I show that financial protectionism comes in at leastthreetypes, only two of which have witnessed a traceable increase since the global financial crisis. These are protection through market entry restrictions (Type 1), through asymmetrically applied regulation (Type 2) and protection through subsidies (Type 3). While Type 1 has not appeared to change significantly since the crisis, Type 2 and Type 3 have. I present empirical evidence which suggests that while Type 3 financial protectionism proliferated during and shortly after the crisis, it is unlikely to continue. Type 2 financial protectionism, I conclude, is more likely to take off into the future because of the nature of interest group effects associated with asymmetric regulation as a form of government intervention.

scholarly journals Government Intervention and Bank Market Power

2020 ◽  
Vol 20 (275) ◽  
Author(s):  
Brandon Tan ◽  
Maria Martinez Peria ◽  
Nicola Pierri ◽  
Andrea Presbitero
Keyword(s):  
Financial Crisis ◽  
Market Power ◽  
Global Financial Crisis ◽  
Banking Industry ◽  
Significant Decline ◽  
Similar Increase ◽  
Matching Method ◽  
Government Interventions ◽  
The Global Financial Crisis ◽  
Shed Light

The COVID-19 pandemic could result in large government interventions in the banking industry. To shed light on the possible consequences on market power, we rely on the experience of the global financial crisis and exploit granular data on government interventions in more than 800 banks across 27 countries between 2007 and 2017. For identification, we use a multivariate matching method. We find that intervened banks experience a significant decline in market power with respect to matched non-intervened banks. This effect is more pronounced for larger and longer interventions and is driven by a rise in costs—mostly because of higher loan impairment charges—which is not followed by a similar increase in prices.

On the formation of a New Paradigm of fiscal Policy

2013 ◽  
pp. 152-158 ◽  
Author(s):  
V. Senchagov
Keyword(s):  
Public Finance ◽  
Fiscal Policy ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Domestic Demand ◽  
Real Economy ◽  
New Paradigm ◽  
Monetary Aggregate ◽  
The Past ◽  
The Global Financial Crisis

Due to Russia’s exit from the global financial crisis, the fiscal policy of withdrawing windfall spending has exhausted its potential. It is important to refocus public finance to the real economy and the expansion of domestic demand. For this goal there is sufficient, but not realized financial potential. The increase in fiscal spending in these areas is unlikely to lead to higher inflation, given its actual trend in the past decade relative to M2 monetary aggregate, but will directly affect the investment component of many underdeveloped sectors, as well as the volume of domestic production and consumer demand.

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