scholarly journals Krise der Finanzmärkte, Krise der Risikoindividualisierung

2009 ◽  
Vol 39 (154) ◽  
pp. 141-159
Author(s):  
Beat Weber
Keyword(s):  
Financial Crisis ◽  
Financial Sector ◽  
The State ◽  
Private Pension ◽  
Household Debt ◽  
Financial Innovations ◽  
Mortgage Credit ◽  
Current Path ◽  
Recent Financial Crisis

The recent financial crisis is also a crisis of the individualisation of risk. The latter has contributed to the expansion of the financial sector by increasing household debt, mortgage credit and private pension accounts. Financial innovations, intended to transfer risk from the banking to the household sector, have led to an underestimation of risks accumulated in the financial sector. When the crisis broke out, risk which was thought to have been privatised returned to the financial sector, and later on to the state, Initial reform efforts presume that minor modifications of the rules governing the financial sector would allow a continuation of the current path of development, The future distribution of risk within society and the role of the financial sector in managing it are topics which have not been on the agenda in post crisis debates so far.

The Governance of Economies and the Economics of Governance

2015 ◽  
Vol 23 (1) ◽  
pp. 179-190
Author(s):  
Safi Shams
Keyword(s):  
Financial Crisis ◽  
Intellectual History ◽  
The State ◽  
The Political ◽  
Systemic Analysis ◽  
Recent Financial Crisis ◽  
Political Economic

Nearly all fractions within the political, economic, and social spheres gave responses to the recent financial crisis. In broad terms, both left-leaning and right-leaning scholars and commentators presented their explanations for the crisis, with confident agendas defining ‘what is wrong’ and how to deal with it. However, as intellectual history shows us, most of those explanations were no less fascinating precisely because they shared more that they acknowledged. A major divide has been over the role of governments in coordinating markets, or, in the case of Roberts’sThe Logic of Discipline, the role of markets in coordinating governments. In this essay, I offer an overview of Alasdair Roberts’s arguments inThe Logic of Discipline. Gradually, I extend the examined issues beyond the state-market dichotomy, arguing that only in understanding the interactive force of the two can a systemic analysis of capitalism hope to be plausible.

Role of Accounting and Audit in the Recent Financial Crisis

2013 ◽  
pp. 91-98
Author(s):  
Alev Dilek Aydin
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Fair Value ◽  
Financial Reports ◽  
Historical Cost ◽  
The Public ◽  
Creative Accounting ◽  
Recent Financial Crisis ◽  
Audit Reports

This study aims to assess the role of accounting and auditing in the recent financial crisis. After each crisis, there have been serious discussions concerning the reasons behind those crises. However, no consensus has yet been achieved until now. In this context, the analysis of the relationships among financial crisis, accounting, and auditing is of utmost importance in better evaluating the structural reasons behind the crisis. There are several points that this chapter aims to analyze to indicate the contributions of accounting and auditing to the recent global financial crisis. These points are: impacts of disregarding the main principles of accounting, the wide use of fair value accounting over cost-based accounting, incorrect and misleading financial and audit reports, applications of creative accounting, and lack of transparency and weaknesses of the auditing process. The debates generally concentrate on the use of fair value (mark-to-market) accounting in the financial reports as opposed to the historical cost method. It should be emphasized that accounting is very important as a key mechanism of market economies, because of its crucial role in the functioning of the markets in accordance with the public interest. The chapter concludes with several suggestions by taking the fact into consideration that accounting and auditing systems should be revised for the better protection of interests of the third parties such as investors, potential investors, and the state.

Porsche, Volkswagen, and CSX: Cars, Trains, and Derivatives

2017 ◽  
pp. 1-10
Author(s):  
David P. Stowell ◽  
Theron McLarty
Keyword(s):  
Financial Crisis ◽  
Hedge Funds ◽  
Family Members ◽  
Share Price ◽  
Investment Banks ◽  
Holding Company ◽  
Wrong Side ◽  
The Family ◽  
Recent Financial Crisis

Family members knew something was very wrong when Adolf Merckle, who had guided the family holding company, VEM Vermogensverwaltung GmbH, through dozens of successful investments, left the house one afternoon in January 2009 and failed to return. That night their fears were confirmed when a German railway worker located Merckle's body near a commuter train line near his hometown of Blaubeuren, about a hundred miles west of Munich. It was no secret that the recent financial crisis had taken a toll on Merckle's investments. He was known in Germany as a savvy investor, but had lost hundreds of millions of Euros after being caught on the wrong side of a short squeeze of epic proportions involving Volkswagen stock. This was not the only large bet against that company's stock. A number of hedge funds, including Greenlight Capital, SAC Capital, Glenview Capital, Tiger Asia, and Perry Capital, lost billions of Euros in a few hours based on their large short positions in Volkswagen's stock following the news on October 26, 2008, that Porsche AG had obtained a large long synthetic position in Volkswagen stock through cash-settled options. In the next two days, this short squeeze produced a fivefold increase in Volkswagen's share price, as demand for shares from hedge funds exceeded the supply of borrowable shares.This case focuses on the massive equity derivative positions entered into by Porsche in relation to Volkswagen stock and by TCI and 3G in relation to CSX stock. Students will learn how equity exposure can be created without buying stock and without prior disclosure. The role of regulators, courts, and investment banks that facilitate these transactions is also explored.

Transparency Regulation in Financial Markets – Moving into the Surveillance Age?

2011 ◽  
Vol 2 (3) ◽  
pp. 305-321
Author(s):  
Iris H-Y Chiu
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Financial Regulation ◽  
Global Financial Crisis ◽  
Financial Sector ◽  
Regulatory Control ◽  
Legal Reforms ◽  
The Global Financial Crisis ◽  
Risk Oversight

In the wake of the global financial crisis, the trajectory of legal reforms is likely to turn towards more transparency regulation. This article argues that transparency regulation will take on a new role of surveillance as intelligence and data mining expand in the wholesale financial sector, supporting the creation of designated systemic risk oversight regulators.The role of market discipline, which has been acknowledged to be weak leading up to the financial crisis, is likely to be eclipsed by a more technocratic governance in the financial sector. In this article, however, concerns are raised about the expansion of technocratic surveillance and whether financial sector participants would internalise the discipline of regulatory control. Certain endemic features of the financial sector will pose challenges for financial regulation even in the surveillance age.

scholarly journals Contagious Adverse Selection

2012 ◽  
Vol 4 (1) ◽  
pp. 1-21 ◽  
Author(s):  
Stephen Morris ◽  
Hyun Song Shin
Keyword(s):  
Financial Crisis ◽  
Adverse Selection ◽  
Upper Bound ◽  
Common Knowledge ◽  
Asset Market ◽  
Small Probability ◽  
Corrosive Effect ◽  
Recent Financial Crisis

We illustrate the corrosive effect of even small amounts of adverse selection in an asset market and show how it can lead to the total breakdown of trade. The problem is the failure of “market confidence,” defined as approximate common knowledge of an upper bound on expected losses. Small probability events can unravel market confidence. We discuss the role of contagious adverse selection and the problem of “toxic assets” in the recent financial crisis. (JEL D82, G01, G12, G14)

scholarly journals Corporate governance in banks: Problems and remedies

2012 ◽  
Vol 3 (2) ◽  
pp. 47-67 ◽  
Author(s):  
Monika Marcinkowska
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Financial Sector ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Main Factors ◽  
Recent Financial Crisis ◽  
Key Aspects

Weak and ineffective corporate governance mechanisms in banks are pointed out as the main factors contributing to the recent financial crisis. Deep changes in this area are necessary to reinforce the financial sector stability. The paper presents key aspects requiring reforms

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