research topics on financial crisis

127 Financial Crisis Essay Topics & Research Paper Ideas

Are you looking for a topic for your financial crisis essay? On this page, you’ll find many interesting financial essay topics and questions about a crisis. These titles are concerned mainly with business, international, and public financial crises rather than personal ones. Feel free to use our financial crisis research paper topics for your case studies, argumentative essays, and other assignments!

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✍️ financial crisis essay topics for college, 👍 good financial crisis research topics & essay examples, 🎓 most interesting crisis topics for essays on finance, 💡 simple financial crisis essay ideas, 💰 2008 financial crisis essay topics, 💸 economic crisis essay topics.

• General Electric Capital and the 2008 Financial Crisis
• Causes of 2008 Financial Crisis in Sony Documentary, “Inside Job”
• The Financial Crisis: The USA in 2007
• The Financial Crisis in the USA in 2007
• 2020-2021 Financial Crisis vs. 2007-2008 Market Crash
• Global Financial Crisis of 2008-2009 Assignment
• “The Causes and Current State of the Financial Crisis” by Zindi
• The Museum of Contemporary Art in Los Angeles: The Financial Crisis of 2008 The economic downturn of 2008 forced MOCA to transform its institutional roles, typology, exhibition approaches, and planning and implement a suitable managerial structure to achieve its future goals.
• Certified Public Accountants and the 2008 Financial Crisis There was a global financial crisis in 2007-2008 that affected most countries and changed international monetary relations.
• Financial Crisis: Beyond 1929 – 2008 Comparison The lack of stability and proper management of financial institutions and financial markets have contributed to the rise of financial crisis in the world today.
• Analysis of the 2008 Financial Crisis The 2008 crisis is a product of its time, an unprecedented housing boom and cash flows from emerging to developed economies.
• Dynamic Complexity and 2008 Financial Crisis Even though many claimed that they knew the triggers of the 2008 financial crisis, they failed to recognize the role dynamic complexity played in the event.
• Predicting Financial Crisis of 2008 Even though numerous countries and separate businesses were caught by surprise by the emerging problems, many experts state that the crisis could be predicted.
• Lebanon’s Financial Crisis and Governmental Measures Lebanon is known to be facing a financial crisis that continues to worsen. Unemployment, as well as poverty rates, have rocketed, and the currency has devalued substantially.
• 2018 Global Financial Crisis: Causes and Effects Deregulation in the financial sector was the primary driver of the 2008 financial crisis because it gave banks the power to fund trading activities with derivatives.
• Financial Crisis and Great Recession: Why Keynesian Model Failed The paper states that while Keynesian economics was based on a dubious premise, to begin with, its mismanaged implementation exacerbated the outcomes.
• Banking Regulations Undermining Financial Crisis Traces of financial crisis and negative externalities have been present across the banking sector for the last several decades.
• Financial Crisis of 2008 in the U.S. – Meltdown As demand for the subprime mortgages outstripped the supply, Wall Street players continued to inflate the prices of the securities that supported the mortgages.
• Public Private Partnership After Global Financial Crisis One of the principles of PPPs is to have the public sector gain access to private sector resources. The resources are in the form of expertise and finance.
• Global Financial Crisis and Market Efficiency Among the lessons are the limitations to the efficient market hypothesis, which, according to Ball, is silent on the supply side of the information market.
• The Dodd-Frank Act. Avoiding Financial Crisis This paperwork looks into the Dodd-Frank Act to establish the essentials of a legal reform law which need to be taken care of to avoid financial crisis.
• Financial Institution in the Financial Crisis of 2008 One of the major crises that have significantly affected many economies of the world severely was that of 2008. The average level of the global GDP fell significantly.
• Global Financial Crisis: Organizational Behaviour and Analysis Reports on the global financial crisis seem to associate psychopathic leadership with the financial losses experienced by firms during the world economic crunch.
• Financial Crisis in Russia in the 1990s and Lessons for Today The financial crisis in Russia which occurred in the 1990s was not only a blow to Russians themselves but also to other major economies.
• Global Financial Crisis in the U.S. The years of the global economic crisis affected one-fifth of all U.S. banks, every third worker was denied employment.
• 1929-1931 Financial Crisis and 2007-2010 Financial Crisis Comparison The key players in the 1929-1931 financial crisis and 2007-2010 financial crisis are almost the same: the financial institutions and stock markets.
• Financial Crisis: Mortgage Lender’s Perspective This paper aims to consider the ethical decisions and problems faced by mortgage lenders such as Rebecca Steele.
• The Financial Crisis and Its Connection With Globalization This essay examines two audio interviews that raise the issue of globalization and its impact on the economic security and policies of international banks.
• Financial Discourse Under Financial Crisis 2007-2008 This paper studies financial columnists’ writing under the 2007-08 economic crash from world-leader newspapers such as Wall-Street-Journal, National-Post, and New-York-Times.
• Post-Global Financial Crisis Companies’ Strategies This paper advances proposals that companies should exert to change their strategies regarding bonds, fixed income, and leveraged securities, given the Global Financial Crisis.
• Types and Causes of Financial Crisis A financial crisis refers to a situation where assets of financial institutions keep on reducing on their value.
• Euro and the Global Financial Crisis The crisis has already affected economies, with a large number of them having negative economic growth. There is hope that recovery will be attained.
• Exchange Control and the Asian Financial Crisis There are many ways to combat Asian crisis aside from using exchange control. Singapore was able to show that timely adjustments in policies allowed them to remain competitive.
• How Financial Crisis Affected Supply Chain Organization? The prevailing economic crisis that has affected the entire globe has altered the way in which various organizations views capital investment and cash.
• The Big Short: Analysis of the Financial Crisis of 2008 The discussion uses the documentary “The Big Short” to give a detailed analysis of the financial crisis of 2008 and the issues associated with it.
• 2007 Financial Crisis and Executive Handling The Financial Crisis of 2007-2008 is the worst crisis of the last years. This work analyzes the executive handling strategy of a crisis to determine whether it is efficient or not.
• Global Financial Crisis and Banking System in Australia The recent global financial crisis affected almost all banks in the world with very few banks shielded from this misfortune.
• The Global Financial Crisis and Its Indicators The paper has outlined indicators of economic and financial crises and discussed global policy and regulatory responses to the global financial crisis of 2008-2009.
• Housing Bubble and the Financial Crisis of 2008-09 This paper overviews the mechanics of the ‘Housing Bubble’ and explains why this crisis is best described as having been deliberately triggered by bankers.
• 2008 Financial Crisis Governmental Decision Making The problem in leadership and effective decision-making revealed by the financial crisis of 2008 was the lack of system in the short-term reactions of the government.
• The Evolution of Financial Crisis The modern world faces numerous problems that could not but impact the state of finances and economy of various countries.
• Risk Management During Financial Crisis in the US The study covers the classification of risks and aspects of risk management. It studies cases of failures in Lehman Brothers and 2007/2008 subprime financing.
• Major British Banking Group and Financial Crisis The purpose of this study is the assess the extent to which financial crisis in the United States of America contributed to the liquidity crash in the Major British banking group.
• 2008 Financial Crisis: Effects and Countermeasures In 2008, the global financial crisis took place. It had started with the financial meltdown in the US financial markets.
• The Financial Crisis of 2008: Problem and Causes The financial crisis of 2008 had influenced the well-being and prosperity of many countries in a negative way. In the paper, hypotheses concerning the causes of the crisis will be evaluated.
• Obama’s Economic Policy and Financial Crisis There were significant expectations laid on the new president after the election. The economic situation Obama had to face when becoming the president was a true disaster.
• The Greek Financial Crisis Resolving The article “So, We Meet Again: The Greek Crisis” emphasizes the core issues that the European Union [EU] is considering in determining how to resolve the Greek financial crisis.
• Factors Generating and Transmitting the Us Financial Crisis
• Complexity and Bank Risk During the Financial Crisis
• Credit Insurance During the Financial Crisis
• Bank Stock and Option Transmissions in Financial Crisis
• Bulgaria From Enterprise Indiscipline to Financial Crisis
• Current Global Financial Crisis and Islamic Financial System
• Constructing Forecast Confidence Bands During the Financial Crisis
• European Financial Crisis and Bank Productivity: Evidence From Eastern European Countries
• American Option Pricing Under Financial Crisis
• 1997 Asian Financial Crisis and China
• China’s Financial Linkages With Asia and the Global Financial Crisis
• Brazil and the 2008 Global Financial Crisis
• Elections, Special Interests, and the Fiscal Costs of Financial Crisis
• European Integration and Financial Crisis: Causes, Implications, and Policy Directions
• Asset Markets Contagion During the Global Financial Crisis
• Corporate Governance and Financial Crisis in the Long Run
• Australia and the Financial Crisis
• Bank Performance and the Financial Crisis: Evidence From Kazakhstan
• Causes and Remedies for a Global Financial Crisis
• Asian Financial Crisis and Korean Trade Dynamics
• Bank Market Power and Lending During the Global Financial Crisis
• Cross-Border Capital Flows Since the Global Financial Crisis
• Confronting Emergency Financial Crisis
• ECB Policy Making and the Financial Crisis
• Bank Performance During the Financial Crisis 2007-2010
• Consumption Behaviour and Financial Crisis in the Netherlands
• Asia: China’s Policy Responses to the Global Financial Crisis
• Cross-Border Bank Lending, Risk Aversion, and the Financial Crisis
• Banking Reforms After the Global Financial Crisis of 2008
• Bank CEO Incentives and the Global Financial Crisis
• American Financial Crisis and Its Impact on Mexican Economy
• Dividends and Bank Capital in the Financial Crisis of 2007-2009
• Employment and the Financial Crisis: Evidence From Tajikistan
• Bank Regulation and Supervision Ten Years After the Global Financial Crisis
• Federal Reserve and Financial Crisis
• Credit Default Swaps and Their Role in Global Financial Crisis
• Bank Dependence and Investment During the Financial Crisis
• Efficient Market Hypothesis and Financial Crisis
• American and European Financial Crisis of 2008
• Bank Valuation and Accounting Discretion During a Financial Crisis
• Audit Quality During the Global Financial Crisis: The Investors’ Perspective
• Credit Rating Agencies Role in Financial Crisis
• China, Japan, and the Us Stock Markets and the Global Financial Crisis
• Explaining Irish Inflation During the Financial Crisis
• Factors That Influenced the Global Financial Crisis of 2008
• Corporate Governance Lessons From the Financial Crisis
• Credit Distortion and Financial Crisis
• Bank Capital and Exposure to the Financial Crisis
• Bankers’ Stock Options, Risk-Taking, and the Financial Crisis
• Equity Markets’ Clustering and the Global Financial Crisis
• 1997 Financial Crisis South Korea
• Bank Lending During the Financial Crisis of 2008
• Asian Financial Crisis and Exchange Rate Pass-Through in Korea
• Capital Controls and Recovery From the Financial Crisis of the 1930s
• Debt Maturity Structure and the 1997 Asian Financial Crisis
• Community Bank Lending During the Financial Crisis
• England’s Rental Market Influenced by Financial Crisis
• Argentina One Year On: From a Monetary Crisis to a Financial Crisis
• Brazil: The First Financial Crisis of 1999
• Factors That Caused the 1997 East Asian Financial Crisis
• Factors that contributed to the 2008 financial crisis.
• The role of risky lending practices in the 2008 crisis.
• The collapse of Lehman Brothers: lessons learned.
• The effectiveness of bailouts and stimulus packages in coping with the 2008 crisis.
• The failures and reforms of rating agencies related to the 2008 crisis.
• The weakened financial oversight as a factor contributing to the 2008 crisis.
• Comparing different countries’ approaches to managing the 2008 financial crisis.
• Moral issues in the financial industry exposed by the 2008 crisis.
• The effects of the 2008 financial crisis on average Americans.
• The role of central banks in mitigating the 2008 crisis.
• The dot-com bubble burst: the rise and fall of the technology sector.
• The 1970s oil price shock: causes and policy responses.
• Currency crises: the role of speculative attacks and exchange rate movements.
• Analysis of currency devaluation and hyperinflation in the Argentine economic crisis.
• The role of financial speculations in economic crises.
• The financial crisis in Greece: causes and austerity measures.
• A comparison of the dot-com bubble and the cryptocurrency bubble.
• The effects of economic crises on social welfare.
• Monetary policy measures to prevent financial crises.
• How does income inequality contribute to economic instability?

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StudyCorgi . 2022. "127 Financial Crisis Essay Topics & Research Paper Ideas." March 1, 2022. https://studycorgi.com/ideas/financial-crisis-essay-topics/.

These essay examples and topics on Financial Crisis were carefully selected by the StudyCorgi editorial team. They meet our highest standards in terms of grammar, punctuation, style, and fact accuracy. Please ensure you properly reference the materials if you’re using them to write your assignment.

This essay topic collection was updated on December 28, 2023 .

The Puzzling Persistence of Financial Crises

The high social costs of financial crises imply that economists, policymakers, businesses, and households have a tremendous incentive to understand, and try to prevent them. And yet, so far we have failed to learn how to avoid them. In this article, we take a novel approach to studying financial crises. We first build ten case studies of financial crises that stretch over two millennia, and then consider their salient points of differences and commonalities. We see this as the beginning of developing a useful taxonomy of crises – an understanding of the most important factors that reappear across the many examples, which also allows (as in any taxonomy) some examples to be more similar to each other than others. From the perspective of our review of the ten crises, we consider the question of why it has proven so difficult to learn from past crises to avoid future ones.

We have no sources of funding or relevant financial relationships to disclose. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

MARC RIS BibTeΧ

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Post-Financial Crisis, a New Generation's Views on Money

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Managing the Liquidity Crisis

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A Crisis of Long-Term Unemployment Is Looming in the U.S.

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A Financial Crisis Is Looming for Smaller Suppliers

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What Silicon Valley Bank Did Right

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The Economic Crisis Requires Returning to Your Core

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Are We On the Verge of Another Financial Crisis?

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Dude, Where's My Capitalism?

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Is This an Analytics-Driven Financial Crisis?

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How Struggling Businesses Can Renegotiate Rent

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• May 05, 2020

Crisis of Faith in the Financial System

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The UK Economic Crisis Might Not Be a One-Off

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• October 03, 2022

The Economic Crisis Feeds on “Macromyopia”

• Anthony K. Tjan
• February 11, 2009

How To Measure Your Company's Risk in a Downturn

• Robert S. Kaplan
• December 19, 2008

The Latest Supply Chain Disruption: Plastics

• Bindiya Vakil
• March 26, 2021

What Has the Eurozone Learned from the Financial Crisis?

• Antonio Fatás
• September 28, 2018

AXA Private Equity: The Diana Investment

• Michael J. Roberts
• William A. Sahlman
• September 29, 2011

Bear Stearns and the Seeds of Its Demise

• Susan Chaplinsky
• October 22, 2008

Countrywide plc

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• February 11, 2011

Note on Currency Crises

• Robert E. Kennedy
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155 Financial Crisis Essays & Examples

Looking for finance essay topics? You’re in the right place! The subject of financial economics is worth exploring.

💸 Top 10 Finance Essay Topics

🏆 top financial crisis essay examples, 💰 financial crisis essay topics, 👍 financial crisis research paper topics, 🏧 exciting financial essay topics, 📑 financial crisis topics for essays, ❓ research questions about financial crisis.

A financial crisis means massive depreciation of financial assets. It usually happens in the forms of banking, currency, and debt crises. Though the issue is studied well, financial crises still occur in various parts of the world.

In your finance crisis essay, you might want to focus on financial management in turbulent periods. Another idea is to discuss what it takes to survive a global financial crisis. One more option is to compare various types of financial crises. Whether you are assigned an argumentative essay, analytical paper, or research proposal, this article will be helpful. Here we’ve collected financial crisis research paper topics, current essay titles, writing tips, and financial crisis essay samples.

• The financial system and its components
• The role of investors in the financial system
• Personal, corporate, and public finance
• Financial risk management
• Quantitative finance and financial engineering
• Behavioral finance: the psychology of investors
• Early history of finance
• History and development of money
• Experimental finance and its goals
• Mathematical modeling in financial markets analysis
• 2008 Financial Crisis in Dubai In order to address the collapse in the real estate market observed in Dubai in 2008, the Emirate’s authorities focused on elaborating stricter regulations on developers of the housing projects and on the buyers. 26 […]
• Impact of World Financial Crisis on the UAE Economy The decline in economic growth was reflected in the significant reduction in the country’s GDP. However, the profitability and growth of the sector reduced substantially in 2009 due to the following factors.
• Financial Crisis of 2007-2008 in ‘The Big Short’ Movie Michael predicted that it would devaluate mortgage bonds and, therefore, decided to short the housing market, that is, to bet on the market crash.
• General Electric and the Financial Crisis of 2008 Although GE’s success is often attributed to the significant amount of financial assets that the company has, it owes its survival through the 2008 crisis to the careful and well-thought-out plan of investing in the […]
• Apple and Hewlett Packard During 2008 Financial Crisis Though the general demand has not reached the level it was before the crisis, many companies have taken advantage of the rising demand and have made tremendous sales. However, the company has increased its spending […]
• British Airways Performance and Global Financial Crisis This paper analyzes the performance of British Airways’ leadership in the wake of the global financial crisis. BA CityFlyer, which is a subsidiary of the British Airways, dominates operations in the London municipality airport.
• The global financial crisis of 2008 The magnitude and the level of disruption of the global economies have led to speculation of various causes that has contributed to its occurrence.
• The Shadow Banking System: Financial Crisis Source The so-called shadow banking system, comprised of numerous institutions operating outside the regulated banking system, has undoubtedly contributed greatly to the emergence of the latest global financial crisis.
• Social Distancing, Financial Crisis and Mental Health The lockdown leads to the inability of people to go to the hospital for mental health consultation and treatment due to the anti-COVID measures. It is possible to talk about the spread of mental health […]
• Aspects of the 2008 Financial Crisis According to Eisinger, none of the participants in the story in the film had any idea of the coming crisis. One of the connections between the film and the textbook is that of corporate social […]
• Essential Points From the Financial Crisis The first important point on slide 10 is the failure to penalize the originator for passing the mortgage to the provider.
• Argentina and Russia’s Financial Crisis Investors’ loss of faith in the Russian economy caused them to sell their Russian holdings, lowering the value of the Russian rouble and raising fears of a financial crisis.
• Ethical Questions in the 2008-2009 Financial Crisis What followed was an investigation of the genesis of the crisis, which revealed that catastrophic failure in oversight, the systemic weakening of usury laws, and outright thuggery by banks and mortgage salespeople were the major […]
• The 2008 Financial Crisis and Housing Policies Under the State Department of Housing and Urban Development, the government introduced the Section 8 Voucher. The function of this voucher was to meet the gap between what the renters would get and the actual […]
• 2008 Financial Crisis from a Neoliberal Perspective While such a position seems reasonable, the overall adherence of the financial system, including accounting and auditing, contributed to the crisis due to the unbearable level of loans and fictitious assets dominating the business.
• Corporate Social Capital During Financial Crisis The credit crisis related to the mortgage problem in 2008 has been one of the massive financial issues of the world since the times of the Great Depression.
• 2008 Global Financial Crisis in Andrew Sorkin’s “Too Big to Fail” The book Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis and Themselves, written by Andrew Ross Sorkin, explores the events and consequences […]
• Financial Crisis in Greece It is doubtless that the value of money is essential in determining a number of factors like the stability of the economy and inflation.
• The Euro Financial Crisis Causes and Outcomes The involvement of the central banks of is an attempt to demonstrate that all the central bankers are collaborating. The Euro crisis has exarcebated the currency swap process as it is now more expensive to […]
• The 2007 Financial Crisis: Development of the Prices of Shares, Corporate Bonds and Loans The crippling of the financial system in the US and the UK in the period beginning late 2007 was a product of crippling loans.
• Challenges Facing College Sports After Financial Crisis When the housing bubble caused financial depression in the national economy, colleges and universities were some of the most affected institutions, especially because the state and federal legislatures were forced to cut funding, the major […]
• How Money Market Mutual Funds Contributed to the 2008 Financial Crisis While how the prices of shares fell below the set $1 per share was a complex process, it became one of the greatest systemic risks posed by the MMMF to the investors and the economy […]
• How Quantitative Models Contribute to the Financial Crisis The motivation behind this study lies in the desire to understand why and how the economies of many countries around the world, especially in the Middle East, have been shaken to the core by the […]
• Causes and Solutions of the 2008 Financial Crisis The current essay describes the causes of the Financial Crisis of 2008 and the solutions suggested by the Keynesian school of thought.
• South Africa’s Response to Global Financial Crisis Desire to the achieve objective that duly fulfils the needs of an individual while being disadvantageous to the majority of individuals led to the crisis.
• Manifestations of the Financial Crisis in Greece The bank which is also affected by the crisis will also exaggerate the cost of this operation and this leads to a loss on my side.
• Global Financial Crisis Impact on Multi-Nationals The credit crisis was linked to the sub-prime mortgage business. So as to encourage lending, the interest rates were also lowered credibly.
• Qantas’ Actions in the Financial Crisis Context The actions taken by Qantas in reducing their costs can be said to be influenced by the global financial crisis, where the decline of the number of passengers in September 2009 was 0.
• Prospects for Chindia After 2008 Global Financial Crisis According to the Australian business press, the recent economic growth achieved was a result of the relationship between itself and the two countries i.e. However, China experienced a hitch on its international markets especially in […]
• The Global Financial Crisis and Its Impact on Australia The collapse of key institutions in the US and other economies in the world has people scurrying back to the drawing board in a bid to rethink economic policy and regulation strategies.
• The Investment Industry in Kuwait Today (During Financial Crisis) One of the confessions was that the investment authority of Kuwait otherwise known as would not be in a position to provide financial support that would assist in the restoration of confidence that was already […]
• The Financial Crisis on the UK Economy Analyze the causes and the impact of the current financial crisis on the UK economy. Due to the above-trend growth in 2006 and 2007, activity needs to be slow.
• Financial Crisis Management in the United Nations A crisis can be defined as the perception of an abnormal situation that is beyond the capability of the business and its scope to deal with.
• Lehman Brothers and the 2008 Financial Crisis As a result, when the management of the bank expected assistance from other firms and the Bank of America, it did not receive the help it needed.
• Global Financial Crisis and Real Estate Issues The central point of the argument is that the real estate market in the US and the policy called “trailer park lending” was the main reason for the worldwide economic crisis.
• 2008 Global Financial Crisis: Crises of Capitalism? Although I had an idea of the possible catalysts of the 2008 global financial meltdown before watching the video, Harvey presented a clear report of the events that occurred before the crisis and put them […]
• Corporate Government During the World Financial Crisis The chairman is the leader of the board of directors while the CEO is the person who oversees the day to day activities of the company; each of them performs a distinct and critical role […]
• Corporate Governance During the Global Financial Crisis The chairman of the board of directors is the leader of both the board and the company whereas the CEO is the person who oversees the day-to-day activities of the company.
• Nucor Corporation After Financial Crisis in the US However, in 2009, the company made the largest loss in its history of $299 million; the loss was the first annual loss since 1966. The depreciated purchasing power parity of the people in 2009 is […]
• Global Financial Crisis and Its Ethical Causes The reason for this is simple the analysis of what had brought about this particular financial crisis and what accounted for the subtleties of its extrication points out to an undeniable fact that it was […]
• Economic Shocks and Financial Crisis in Kuwait At the year 2008, the intensity of the crisis was at the peak, causing oil prices which led to a decrease in production and drop in GDP of Kuwait.
• Financial Crisis of 2008 Economics specialists have argued that the global financial crisis of 2008 was caused by a combination of factors, including the abundance of cheap credits in the macroeconomic environment as well as counterproductive decision-making in governments […]
• Banking Instability During the Global Financial Crisis Though the combination of aspects that resulted in the banking instability in the course of the global financial crisis had never been witnessed previously, the shift from extreme risk-taking to fiscal chaos was a common […]
• Rotana Company’s Financial Crisis and Culture This statement can be seen as being true to the values of the company and how it addressed the issues caused by the 2008 financial crisis.
• British and Dutch Banks After 2008 Financial Crisis Many countries utilised the opportunity of the crisis to work on improving corporate governance and leadership to avoid similar crises in the future.
• The Global Financial Crisis and Its Impacts In addition, a case of a company is studied to evaluate the impact of GFC on a particular firm, and consider the capability of the firm to survive the crisis.
• The Global Financial Crisis and Its Effect The latest global financial crisis managed to restart a debate on the value of both the stakeholder as well as shareholder theories. This led to the managers being more attentive to the prices of the […]
• Australian Banks in the Global Financial Crisis To understand how Australian banks managed the GFC, it is essential to pay attention to the very structure of its banking.
• Financial Crisis and Great Recession Causality The financial crisis is typically viewed as a primary factor behind the development of the Great Recession. Instead, the financial crisis of 2008 can be deemed a prerequisite of the Great Recession as well as […]
• Financial Crisis in Ferguson’s “The Ascent of Money” By Ferguson, the main purpose of the historian is to relieve humanity from the financial illusions on the examples of the past.
• Global Financial Crisis and Regulatory Responses In the aftermath of the crisis, the government through the Federal Reserve embarked on a mission to restore these financial institutions to their original position.
• Reasons and Consistency of the Financial Crisis 2007-2008 The financial crisis that occurred in 2007-2008 is frequently defined as one of the major financial events at the beginning of the 2000s.
• Financial Crisis and Its Impact on UAE Construction The determination of this research is to evaluate the enactment of construction corporations in the United Arab Emirates for the period of the pre and post worldwide eras of financial disaster, which is from 2006 […]
• 1997 Asian Financial Crisis and Its Consequences Beja explores the impacts the crisis had on these countries and the outcomes that occurred years after the end of the crisis.
• American Financial Crisis and Its Prevention The interviewee brings about the idea of bureaucracy and political aspects that contributed to the problem, highlighting the corruption and ineffectiveness in the government when bailing out the institutions.
• West Midlands Designers and Architects Ltd: Financial Crisis The second option, which is by merit, will favor the company’s future and also acceptable by a number of the current employees.
• Financial Crisis of 2008 and Consumer Behavior Although the main cause of the global financial crisis that began in 2007 was the bursting of the housing bubble, economists largely agree that the ensuing recession was the outcome of a combination of several […]
• Financial Crisis of 2007-2008: Laws and Policies Nevertheless, one should not assume that the absence of legal safeguards is the only factor that led to this crisis since it is necessary to consider the development of the economy and lack of internal […]
• Financial Crisis in Greece: Origin and Aspects This essay seeks to establish the nature and origin of the crisis, Greece’s advantages and disadvantages in the Eurozone, and Greece’s fiscal policy.
• Austerity Measures after of the World Financial Crisis That is why it becomes obvious that there is a great need in some austerity measures whose main aim is to overcome the results of the world financial crisis and guarantee the stability of the […]
• US Financial Crisis Hit and Its Economy Effect He is an economist and runs a column in the Atlantic magazine on financial matters in the U.S. The article is by Lee Don, a columnist, and journalist in the U.
• The 2008 Financial Crisis In September 2008, the two giant mortgage companies faced the danger of bankruptcy as they had guaranteed close to half of the total mortgages in the US.
• Impact of the Global Financial Crisis on the World The recent global financial crisis happened between the years 2007 and 2008 that was a serious threat to the financial markets in the United States and the rest of the world.
• Effects of Hedge Funds on the Global Financial Crisis The article titled “Do not Blame Hedge Funds for Financial Crisis, Study Says,” in 19th September 2012 issue of the The Wall Street Journal, attempts to remove the hedge fund from blame in the global […]
• Role of International Financial Institutions in 2008 Financial Crisis Even more disappointing is the fact that the financial regulatory standards that were in place were unable to anticipate and therefore avert the ramifications of the financial crisis before it happened as should have been […]
• Global Financial Crisis: Corruption and Transparency Due to the large number of the emerging markets, the global financial regulators lacked a proper mechanism to handle the situation.
• Managing Financial Crises In this line, the financial institutions would have distributed the risk to all the stakeholders. The involvement of many players in the management systems of banks makes it out rightly difficult to blame banks for […]
• ‘What Went Wrong? An Initial Inquiry into the Causes of the 2008 Financial Crisis’ Additionally, failures at the managerial group also resulted in the crash as it led to a re evaluation of the cost of the agencies by the investors.
• Training and Skills Development Programs vs. the Global Financial Crisis The Level of education influences the rate of unemployment in an economy. The increase in gross domestic products is attributed to levels of education and employment.
• The Worst of the Global Financial Crisis Is Still To Come Therefore, considering the numerous flaws that exist in the global economic system and the fact that, most governments have deviated from addressing the real causes of the global financial crisis; hence, formulate strategies of avoiding […]
• The Financial Crisis Impacts on East Asian States The policy response to the currency crisis later led to a crisis in the financial institutions. The financial crisis was similar to the crisis that hit Mexico in 1995 and the difference was only on […]
• States regulatory response to the current financial crisis Having been cited by the International Monetary Fund as the leading contributor towards the world economy in 2007, the onset of the financial crisis meant economic disaster to the state.
• Financial Risk Management: Based on the 2008 Global Financial Crisis While it is believed that the U.S.subprime mortgage market might have prompted the occurrence of the global financial crisis, the primary cause of the crisis was founded on the flawed institutional practices and the instability […]
• Carolina Panthers Financial Crisis While it was expected that the team could lose its operating income because of the losses it went through last season, the team emerged as one of the teams that profited greatly in the 2010/2011 […]
• EU Financial Crisis: Risk Management Failures This is for example over- dependence on: the capability of managers to create returns.the merits of financial innovation in efficiently spreading returns and risks in the market, the sufficiency of data and models used for […]
• Public Discourse under the Financial Crisis in the U.S and Canada The number of people that lost their jobs, the number of companies that ran into bankruptcy and dwindled in self-destruction through foreclosures and closures, the amount of money that was pumped into the economy by […]
• Impacts of Financial crisis on Bahrain Impacts of financial crisis on the country’s economy have accelerated debate within the mainstream of economics and many market analysts have devised economic stimulus plan to confront the crisis.
• Effect of Global financial crisis on the Gulf Countries The financial crisis which hit the US in the late months of the year 2007 have over time spread to almost all other countries in the world.
• Cultural Change at Texaco and Financial Crisis The most important and influential challenge was the opportunity to solve the questions of exclusion and discrimination of the minorities and women from the company’s workforce in such high status posts like management.
• After the 2007-2010 Financial Crisis: Across the Chaos and Destruction to the Universal Order Because of the half-baked decisions concerning the integration in the Eurozone had been taken, the Great Britain had to sign the agreement with Brussels concerning the further economical steps, which is likely to drive to […]
• Global Financial Crisis Problems This paper discusses the problem created by the global financial crisis and assesses the viability of the courses of actions taken to counter the problem.
• Global Financial Crisis of 2007-2010 In particular, it has shown that many financial institutions are too much dependent on one another, and the collapse of one organization can result in the collapse of the entire system.
• Eurozone Financial Crisis Henceforth, an analysis is drawn of the causes of crisis in the Eurozone. In addition, the effect of this Eurozone crisis did spread to other countries.
• East Asian Financial Crisis Analysts have argued that the inherent problem with the approach in the region, especially in Japan, was primarily due to much involvement of the government in guiding the free economy.
• The Financial Crisis Causes: Moral Hazard and Adverse Selection The consequences were similar in most parts of the world with the main indicators being debt crises, high unemployment rates, a reduction in the number of home ownership facilities and the demand for the same, […]
• East Asian Financial Crisis of 1997-98 However, the quick actives responses by the states in the region helped in the quick aversion of the crisis and its impacts on the region’s economy.
• American Financial Crisis It discussed the underlying causes of the crisis and the impact it has had on the economy of the United States.
• Short-term decisions lead to the emergence of the global financial crisis Over the years, since the great depression in the 1930’s, the role of management seems to have diverted significantly from expectations as illustrated by the global financial crisis.
• Spain’s Financial Crisis The disproportionate growth in the real estate sector, coupled with the expansion of credit needed to finance it, is at the basis of the economic imbalances.
• Global Financial Crisis Causes and Impacts After a number of years since the first occurrence of the crisis, it is still not possible to explain fully the impact of the global financial crisis because the economic emergency keeps on hindering and […]
• Minsky’s Economic volatility theory as an evaluation of Financial Crisis The modern Marxist, FSA, and organizational Keynesian perspectives associate the causes of the financial slow down with the implementation of the liberal development framework in 1970s when the “Accord of Detroit” development framework was ditched.
• The Global Financial Crisis of 2008-2009 The two key sectors that take the blame for the financial crisis of 2008 and 2009 are the financial sector and the real estate industry.
• Global Financial Crisis Initially, the collapse of AIG, the under-performance of Fallie Mac and Fannie Mac and the merging of the Bank of America and the Merrill Lynch were the start point of the financial problems in the […]
• Global Financial Crisis of the United States Mortgage Industry The deterioration of economies called for government to take fast and immediate measures to rescue their nations; the United Nations for instance had to make policies that protected its local industry from the adverse effects […]
• What Caused the 2008 Financial Crisis in the USA? The opposite trends in the cost of mortgage credit and the housing prices also made the home owners participate more in the market since the risk of default was much lower.
• The Global Financial Crisis and Capitalism for the Elite Rich This Ideology adopted by many if not all of the western nations upholds the private ownership of business and institutions and the owners of these entities are allowed to spread out as much as they […]
• The UK Banking Practice That Led to Financial Crisis Crisis of the magnitude that was experienced is a real threat to the economy of any country and it is imperative for people to learn as much as they can to avoid the circumstance that […]
• The effect of global financial crisis on Saudi Arabian economy The countries stability of the banking sector was also seen in the change in banking activities over the period of global financial crisis, the country recorded the worst banking growth rate in the years between […]
• The effect of the global financial crisis on political and financial risks The negative effects of the global financial crisis have been felt in most parts of the world i.e.in the advanced countries, the emerging markets and in the developing world.
• Global Trade During the Financial Crisis (from 2006 to 2010) Each of the major trade regions of the world seemed to concentrate more on a given branch of trade and give their outputs to the rest of the world.
• Global Financial Crisis Impact on Australian and World Economies After affecting the banking and credit sectors in the US, the global crisis slowly crept to other countries and in the process became a world crisis.
• International Finance. Main Causes of Recent Financial Crisis One of the specific factors that can be attributed to the recent international financial crisis was the loss on housing mortgage loans due to the decline of mortgage prices in the market.
• The 2008 global financial crisis Soros asserts that whereas the U.S.subprime mortgage market is believed to have prompted the current financial crisis, the basis of the crisis derived from the flawed practices and institutions of the current financial system.
• Benefits of the Old Fashioned Business Models in the light of Global financial Crisis The purpose of this essay is to establish the benefits and drawbacks of old fashioned business models in the light of global financial crisis with reference to Airdrie bank of Lanarkshire in the UK.
• The Recent Financial Crisis The financial crisis has been considered by most economists to be the worst crisis since the Great Depression as it contributed to the failure of major financial institutions in the U.S.and the decline of consumer […]
• Turkey’s 2000-2001 Financial Crisis The first crisis began at the early 90’s while the second began at the beginning of the 21st century. This led to the collapse of the exchange rate and the beginning of the country’s second […]
• The 1997-1998 Asian Financial Crisis This growth was associated with “inflow of investments, improvements in technology, increases in education, a ready supply of labor as people moved from the countryside to the cities to work in factories, and reduced restrictions […]
• Impact of the Global Financial Crisis on the Healthcare Industry The global financial crisis threatened to lead to the total breakdown of the global economy. The global financial crisis reduced the funding of that the healthcare facilities received from the government.
• Changes in Financial Markets and it impact on Recent Financial Crisis Due to the above reason, this study seeks to examine the reasons behind the changes in financial markets during the last 30 years and the role of these changes in the recent financial crisis.
• Argentina’s Financial Crisis: A Critical Review of Causes and Effects The unprecedented expansion in the country’s markets and economy at large was attributed to the rise in agricultural exports. The country’s economy was heading in the right direction following the introduction of the convertibility system.
• Cause of the Financial Crisis The reason for this is quite apparent it was namely the Democrats’ preoccupation with ‘combating poverty’ that resulted in passing of the infamous Community Reinvestment Act and in reinforcing its provisions through the course of […]
• Disadvantages of Developed Country (America) When 2008 Financial Crisis However, the scholars do not singly use this as a reason of terming a country as being developed but also adds on to the fact that people in that country should be having the freedom […]
• The Global Financial Crisis Every entity is faced with the inevitable reality of making financial decisions in the following departments; investment for instance where to open shop, dividends for example whether or not to pay and when, working capital […]
• Theories on Causes of Financial Crisis A financial system shock disrupted the situation and the prices of the houses fell and many people could not pay their loans.
• Wesfarmers Limited and the Global Financial Crisis In order to put into perspective the effect of the GFC, we shall study the profitability of the firm from 2007 to 2010.
• Regulation in the Financial Crisis 2008 While numerous claims have been put forth to explain the causes of the 2007-2009 financial crisis, there is almost a universal agreement that the major causes of the financial crisis was the combination of a […]
• The 2008 Financial Crisis: Causes and Consequences Foster and Magdoff Perspective of 2008 Financial Crisis Foster and Magdoff theory that attempts to explain the 2008 financial crisis attributes it to broader factors of monopoly finance capitalism which is a function of a […]
• Ethical Aspects of the Financial Crisis Yet, they would agree that to some degree, the origins of the financial crisis can be traced to the immoral behavior of some individuals who attempted to maximize their own benefits of at the expense […]
• Is Globalization the Main Culprit for the 2008 Global Financial Crisis? Globalization has eroded the powers and the sovereignty of the state, the role of the state to regulate and to steer forward the economy has been largely ignored at the expense of the market, these […]
• The Importance of Ethics in Business in Light of the Recent Global Financial Crisis The lack of concern for the overall good of the society stemmed from the increase in equity-based compensation to top executives which resulted in the declaration that “the paramount duty of management and board is […]
• What Was the Biggest Financial Crisis?
• Did Financial Crisis Alter the Level of Competition in the EMU Banks?
• What Is the Effect of Financial Crisis?
• What Are the Three Stages of Financial Crisis?
• Did Firms Manage Earnings More Aggressively during the Financial Crisis?
• What Causes a Financial Crisis?
• Did the Recent Housing Boom Signal the Global Financial Crisis?
• How Can We Solve Financial Crisis?
• What Is Another Word for Financial Crisis?
• What Is the First Stage in Financial Crisis?
• Can the Government Take Money from Your Bank Account in a Financial Crisis?
• What Was the Worst Financial Crisis in History?
• What Caused the Global Financial Crisis?
• Did the Financial Crisis Affect the Market Valuation of Large Systemic U.S. Banks?
• What Is the Impact of the Global Financial Crisis?
• What Happened in the 2008 Financial Crisis?
• How Did the Financial Crisis Started?
• Did Family Firms Perform Better During the Financial Crisis?
• Did Investors Herd During the Financial Crisis?
• Did Relational Capital Matter during the Financial Crisis?
• Did the Asian Financial Crisis Scare Foreign Investors Out of Japan?
• Did the Financial Crisis in Japan Affect Household Welfare Seriously?
• Did the Global Financial Crisis Alter the Oil–Gasoline Price Relationship?
• Was the 2008 Financial Crisis Caused by Lack of Ethics?
• Was the Financial Crisis Caused by Bankers or Government?
• Chicago (A-D)
• Chicago (N-B)

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Articles and Papers

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Financial Crisis Articles & Papers: Possible Solutions / Next Steps

The articles and papers listed here cover aspects of the financial crisis and represent a range of opinions and analysis. The Federal Reserve Bank of St. Louis does not endorse the views presented in these articles or papers.

Addressing TBTF by Shrinking Financial Institutions: An Initial Assessment by Gary H. Stern and Ron Feldman in Federal Reserve Bank of Minneapolis , May 2009

In this essay, the authors review concerns about the "make-them-smaller" reform. They recommend several interim steps to address TBTF that share some similarities with the make-them-smaller approach but do not have the same failings. Specifically, they support (1) imposing special deposit insurance assessments for TBTF banks to allow for spillover-...  

Aiding the Economy: What the Fed Did and Why by Ben S. Bernanke in Board of Governors , November 2010

Federal Reserve Chairman Bernanke's Op-ed column published in The Washington Post on November 4, 2010

Alt-A: The Forgotten Segment of the Mortgage Market by Rajdeep Sengupta in Federal Reserve Bank of St. Louis Review , January 2010

This study presents a brief overview of the Alt-A mortgage market with the goal of outlining broad trends in the different borrower and mortgage characteristics of Alt-A market originations between 2000 and 2006. The paper also documents the default patterns of Alt-A mortgages in terms of the various borrower and mortgage characteristics over th...  

Are All the Sacred Cows Dead? Implications of the Financial Crisis for Macro and Financial Policies by Asli Demirgüç-Kunt and Luis Servén in World Bank Policy Research Working Paper , January 2009

The recent global financial crisis has shaken the confidence of developed and developing countries alike in the very blueprint of financial and macro policies that underlie the western capitalist systems. In an effort to contain the crisis from spreading, the authorities in the US and many European governments have taken unprecedented steps of prov...  

As In the Past, Reform Will Follow Crisis   by James Bullard in Federal Reserve Bank of St. Louis Regional Economist , July 2009

Historically, crises have led to significant legislation. The current financial crisis will undoubtedly spur further regulation. Successful regulation should be aimed not at preventing all failures, but rather at establishing a clear and credible process such that if a failure were to occur, it would take place in an orderly fashion and not cause i...  

Asset Bubbles and Systemic Risk by Eric S. Rosengren in Federal Reserve Bank of Boston Speech , March 2010

The Global Interdependence Center's Conference on "Financial Interdependence in the World's Post-Crisis Capital Markets" Philadelphia, Pennsylvania

An Autopsy of the U.S. Financial System: Accident, Suicide, or Negligent Homicide? by Ross Levine in Brown University Working Paper , April 2010

In this postmortem, I find that the design, implementation, and maintenance of financial policies during the period from 1996 through 2006 were primary causes of the financial system’s demise. The evidence is inconsistent with the view that the collapse of the financial system was caused only by the popping of the housing bubble and the herding ...  

Bank Capital: Lessons from the Financial Crisis by Asli Demirguc-Kunt, Enrica Detragiache, Ouarda Merrouche in World Bank Policy Research Working Paper, WPS5473 , November 2010

Using a multi-country panel of banks, the authors study whether better capitalized banks fared better in terms of stock returns during the financial crisis.

Bank Exposure to Commercial Real Estate by Yuliya Demyanyk and Kent Cherny in Federal Reserve Bank of Cleveland Economic Trends , August 2009

As rising home foreclosures and delinquencies continue to undermine a financial and economic recovery, an increasing amount of attention is being paid to another corner of the property market: commercial real estate. This article discusses bank exposure to the commercial real estate market.

Bank Relationships and the Depth of the Current Economic Crisis by Julian Caballero, Christopher Candelaria, and Galina Hale in Federal Reserve Bank of San Francisco Economic Letter , December 2009

The financial crisis has been worldwide in scope, but the severity has differed from country to country. Those countries whose banks played a more central role in the global financial system, were important intermediaries, or had extensive direct relationships tended to be less seriously affected, as measured by the extent of the decline in their s...  

Bankers Acceptances and Unconventional Monetary Policy: FAQs by Richard G. Anderson in Federal Reserve Bank of St. Louis Economic Synopses , March 2009

An expansion and FAQ following on an earlier article ("Bankers Acceptances: Yesterday's Instrument to Re-Start Today's Credit Markets?"). Describes possible implementation of a Banker's Acceptances program at the Federal Reserve.

Bankers’ Acceptances: Yesterday’s Instrument to Restart Today's Credit Markets? by Richard G. Anderson in Federal Reserve Bank of St. Louis Economic Synopses , January 2009

This note suggests considering an old—not new—financial market instrument: bankers’ acceptances. Bankers’ acceptances are one of the world’s older financial instruments, used as early as the twelfth century. Bankers’ acceptances have a long history in the Federal Reserve. Bankers’ acceptances are an old idea whose time may have returned—but with c...  

Buying Troubled Assets by Lucian A. Bebchuk in Harvard Law and Economics Discussion Paper (via SSRN) , April 2009

This paper analyzes how government intervention in the market for banks’ troubled assets is best designed, and also uses this analysis to evaluate the public-private investment program announced by the U.S. government in March 2009. The author begins by presenting the case for using government funds to restart the market for troubled assets. He the...  

Can Monetary Policy Affect GDP Growth? by Yi Wen in Federal Reserve Bank of St. Louis Economic Synopses , April 2009

Discusses whether the growth of the monetary base is associated with gaster growth of real output.

Central Bank Response to the 2007-08 Financial Market Turbulence: Experiences and Lessons Drawn by Alexandre Chailloux, Simon Gray, Ulrich Klüh, Seiichi Shimizu, and Peter Stella in IMF Working Paper , September 2008

The paper reviews the policy response of major central banks during the 2007–08 financial market turbulence and suggests that there is scope for convergence among central bank operational frameworks through the adoption of those elements that proved most instrumental in calming markets. These include (i) rapid liquidity provision to a broad rang...  

Challenges for monetary policy in EMU by Axel Weber in Homer Jones Memorial Lecture , April 2011

Bundesbank President discussed the financial crisis and its lessons for monetary policy in a lecture at the St. Louis Fed.

The Changing Nature of Financial Intermediation and the Financial Crisis of 2007-09 by Tobias Adrian and Hyun Song Shin in Federal Reserve Bank of New York Staff Reports , March 2010

The financial crisis of 2007-09 highlighted the changing role of financial institutions and the growing importance of the “shadow banking system,” which grew out of the securitization of assets and the integration of banking with capital market developments. This trend was most pronounced in the United States, but it also had a profound influence o...  

Commercial Bank Lending Data during the Crisis: Handle with Care by Silvio Contessi and Hoda El-Ghazaly, in Federal Reserve Bank of St. Louis Economic Synopses , August 2009

A discussion of commercial bank lending data, inferences that can be drawn from the data, and some caveats about the data.

The Commercial Paper Market, the Fed, and the 2007-2009 Financial Crisis by Richard G. Anderson and Charles S. Gascon in Federal Reserve Bank of St. Louis Review , November 2009

Since its inception in the early nineteenth century, the U.S. commercial paper market has grown to become a key source of short-term funding for major businesses, with issuance averaging over $100 billion per day. In the fall of 2008, the commercial paper market achieved national prominence when increasing market stress caused some to fear that,...  

Confronting Too Big to Fail by Daniel K. Tarullo in Speech, Board of Governors , October 2009

Tarullo suggests that the reform process cannot be judged a success unless it substantially reduces systemic risk generally and, in particular, the too-big-to-fail problem. This speech addresses the task of forging an effective response to this problem

The Consolidation of Financial Market Regulation: Pros, Cons, and Implications for the United States by Sabrina R. Pellerin, John R. Walter, and Patricia E. Wescott in Federal Reserve Bank of Richmond Working Paper , May 2009

The U.S. financial system has changed significantly over the last several decades without any major structural changes to the decentralized financial regulatory system, despite numerous proposals. In the past decade, many countries have chosen to consolidate their regulators into a newly formed "single regulator" or have significantly reduced the n...  

Conventional and Unconventional Monetary Policy by Vasco Cúrdia and Michael Woodford in Federal Reserve Bank of New York Staff Reports , November 2009

We extend a standard New Keynesian model both to incorporate heterogeneity in spending opportunities along with two sources of (potentially time-varying) credit spreads and to allow a role for the central bank’s balance sheet in determining equilibrium. We use the model to investigate the implications of imperfect financial intermediation for famil...  

Cracks in the System: Repairing the Damaged Global Economy by Olivier Blanchard in International Monetary Fund: Finance and Development , December 2008

The financial crisis has exposed weaknesses in the current regulatory and supervisory frameworks, which have made clear that action is needed to reduce the risk of crises and to address them when they occur.

Credible Alertness Revisited by Jean-Claude Trichet in Federal Reserve Bank of Kansas City Symposium , August 2009

A discussion of three issues facing central banks: the relationship between asset prices and monetary policy; the effectiveness of the standard interest rate instrument; and the design of non-standar monetary policy measures such as the ECB's enhanced credit support.

The Credit Crisis and Cycle Proof Regulation by Raghuram G. Rajan in Federal Reserve Bank of St. Louis Review , September 2009

Rajan offers what he called "cycle proof regulation" to help head off a future crisis. Among other things, he proposed: -Highly leveraged financial institutions would be required to buy fully collateralized insurance. This insurance would inject contingent capital into those institutions when they're in trouble. -Financial institutions considered...  

The Credit Crisis: Conjectures about Causes and Remedies by Douglas W. Diamond and Raghuram G. Rajan in AEA Presentation Paper , December 2008

What caused the financial crisis that is sweeping across the world? What keeps asset prices and lending depressed? What can be done to remedy matters? While it is too early to arrive at definite answers to these questions, the focus of this paper is to offer offer informed conjectures.

The Credit Crunch of 2007-2008: A Discussion of the Background, Market Reactions, and Policy Responses by Paul Mizen in Federal Reserve Bank of St. Louis Review , September 2008

This paper discusses the events surrounding the 2007-08 credit crunch. It highlights the period of exceptional macrostability, the global savings glut, and financial innovation in mortgage-backed securities as the precursors to the crisis. The credit crunch itself occurred when house prices fell and subprime mortgage defaults increased. These event...  

Credit Derivatives: Systemic Risks and Policy Options by John Kiff, Jennifer Elliott, Elias Kazarian, Jodi Scarlata, and Carolyne Spackman in IMF Working Paper , November 2009

Credit derivative markets are largely unregulated, but calls are increasingly being made for changes to this “hands off” stance, amidst concerns that they helped to fuel the current financial crisis, or that they could be a cause of the next one. The purpose of this paper is to address two basic questions: (i) do credit derivative markets increase ...  

The Crisis by Alan Greenspan in Brookings Papers on Economic Activity , April 2010

To prevent a future financial crisis, the primary imperative must be increased regulatory capital and liquidity requirements on banks and significant increases in collateral requirements for globally traded financial products, irrespective of the financial institutions making the trades, Greenspan says. He offers his views about regulatory reform,...  

The Curious Case of the U.S. Monetary Base by Richard G. Anderson in Federal Reserve Bank of St. Louis Regional Economist , July 2009

Recent increases in the monetary base are far greater than any previously in American history, surely a "noble experiment" in policymaking. Whether these policies can succeed—and without accelerating inflation—remains to be seen.

The Dependence of the Financial System on Central Bank and Government Support by Petra Gerlach in BIS Quarterly Review , March 2010

How much does the banking sector depend on public support? Utilisation of many support facilities has declined, due mainly to a fall in demand. Supply factors play a smaller, but not insignificant role, as governments and central banks have tightened the conditions on which certain support measures are available or have phased them out entirely. Ho...  

Do Central Bank Liquidity Facilities by Jens H. E. Christensen, Jose A. Lopez, and Glenn D. Rudebusch in Federal Reserve Bank of San Francisco Working Paper , June 2009

In response to the global financial crisis that started in August 2007, central banks provided extraordinary amounts of liquidity to the financial system. To investigate the effect of central bank liquidity facilities on term interbank lending rates, the authors estimate a six-factor arbitrage-free model of U.S. Treasury yields, financial corporate...  

Emerging from the Crisis: Where Do We Stand? by Ben S. Bernanke in Board of Governors Speech , November 2010

Speech by Federal Reserve Chairman at the Sixth European Central Bank Central Banking Conference, Frankfurt, Germany

Factors Affecting Efforts to Limit Payments to AIG Counterparties by Thomas C. Baxter Jr. in Federal Reserve Bank of New York , February 2010

Testimony before the Committee on Government Oversight and Reform, U.S. House of Representatives

The Fed at a Crossroads by James Bullard in Federal Reserve Bank of St. Louis Speech , March 2010

Remarks at St. Cloud State University's 48th annual Winter Institute

Fed Confronts Financial Crisis by Expanding Its Role as Lender of Last Resort by John V. Duca, Danielle DiMartino and Jessica J. Renier in Federal Reserve Bank of Dallas Economic Letter , February 2009

The unprecedented actions the Fed has taken to combat the financial crisis have had some success in unclogging the economy's financial arteries, according to this article.

The Fed's Expanded Balance Sheet by Brian P. Sack in Federal Reserve Bank of New York Speech , December 2009

The Fed’s balance sheet has moved to the forefront of its policy efforts. Accordingly, to understand the policy choices that lie ahead for the Federal Reserve, one has to understand how the balance sheet got to where it is and what effects it has had on financial markets.

The Federal Reserve Bank of New York's Involvement with AIG by Thomas C. Baxter and Sarah J. Dahlgren in Federal Reserve Bank of New York , May 2010

Joint written testimony of Thomas C. Baxter and Sarah Dahlgren before the Congressional Oversight Panel, Washington, D.C.

Federal Reserve Liquidity Programs: An Update by Niel Willardson and LuAnne Pederson in The Region (Federal Reserve Bank of Minneapolis) , June 2010

A review of the size, status and results of the Fed's programs to cope with crisis

The Federal Reserve's Asset Purchase Program by Janet Yellen in Speech at the The Brimmer Policy Forum, Allied Social Science Associations Annual Meeting, Denver, Colorado , January 2011

Yellen discusses the rationale for the decision by the Federal Open Market Committee (FOMC) in November 2010 to initiate a new program of asset purchases, and addresses questions (FAQs) regarding the program's economic and financial effects both in the U.S. and abroad.

The Federal Reserve's Balance Sheet: An Update by Ben S. Bernanke in Speech, Board of Governors , October 2009

Bernanke reviews the most important elements of the Federal Reserve's balance sheet, as well as some aspects of their evolution over time. With this, he explains the steps the Federal Reserve has taken, beyond conventional interest rate reductions, to mitigate the financial crisis and the recession, as well as how those actions will be reversed as ...  

The Federal Reserve's Liquidity Facilities by William C. Dudley in Speech , April 2009

Remarks at the Vanderbilt University Conference on Financial Markets and Financial Policy Honoring Dewey Daane, Nashville, Tennessee

The Federal Reserve's Policy Actions during the Financial Crisis and Lessons for the Future by Donald L. Kohn in Board of Governors Speech , May 2010

Speech at the Carleton University, Ottawa, Canada

The Federal Reserve’s Commercial Paper Funding Facility by Tobias Adrian, Karin Kimbrough, and Dina Marchioni in Federal Reserve Bank of New York Staff Reports , January 2010

The Federal Reserve created the Commercial Paper Funding Facility (CPFF) in the midst of severe disruptions in money markets following the bankruptcy of Lehman Brothers on September 15, 2008. The CPFF finances the purchase of highly rated unsecured and asset-backed commercial paper from eligible issuers via primary dealers. The facility is a liquid...  

Financial Crises and Economic Activity by Stephen G. Cecchetti, Marion Kohler and Christian Upper in Federal Reserve Bank of Kansas City Symposium , August 2009

The authors use historical data to examine past systemic banking crises and compare them to the current crisis. They also look at the long-term effects of a crisis on economic output.

The Financial Crisis and the Recession: What is Happening and What the Government Should Do by Robert E. Hall and Susan E. Woodward

Woodward and Hall frequently update a document on the crisis and recession. The highlights of the document are: Low interest rates in the early part of the decade were responsible monetary policy to head off deflation, not an irresponsible contribution to a housing price bubble. The most important fact about the economy today is the collapse of s...  

The Financial Crisis of 2008: What Needs to Happen after TARP by Campbell R. Harvey in Duke University Working Paper , October 2008

Harvey argues that the Trouble Asset Relief Program (TARP), signed into law on October 3, 2008, is an insufficient policy initiative to end the current credit crisis. In addition to modifications in implementing the program, other policy initiatives are necessary. Harvey sets forth several proposals to help end the crisis.

Fiscal Responsibility and Global Rebalancing by Janet L. Yellen in Federal Reserve Board of Governors , December 2010

Speech by Federal Reserve System Board of Governors Vice Chair at the Committee for Economic Development 2010 International Counterparts Conference, New York, New York .

Focusing on Bank Interest Rate Risk Exposure by Donald L. Kohn in Board of Governors Speech , January 2010

At the Federal Deposit Insurance Corporation's Symposium on Interest Rate Risk Management, Arlington, Virginia

The Future of Securities Regulation by Luigi Zingales in University of Chicago Working Paper , January 2009

The U.S. system of securities law was designed more than 70 years ago to regain investors’ trust after a major financial crisis. Today we face a similar problem. But while in the 1930s the prevailing perception was that investors had been defrauded by offerings of dubious quality securities, in the new millennium, investors’ perception is that they...  

Getting Back on Track: Macroeconomic Policy Lessons from the Financial Crisis by John B. Taylor in Federal Reserve Bank of St. Louis Review , May 2010

This article reviews the role of monetary and fiscal policy in the financial crisis and draws lessons for future macroeconomic policy. It shows that policy deviated from what had worked well in the previous two decades by becoming more interventionist, less rules-based, and less predictable. The policy implications are thus that policy should “g...  

Has the Recent Real Estate Bubble Biased the Output Gap? by Chanont Banternghansa and Adrian Peralta-Alva in Federal Reserve Bank of St. Louis Economic Synopses , December 2009

The authors offer a word of caution to policymakers: Policies based on point estimates of the output gap may not rest on solid ground.

The High Cost of Exceptionally Low Rates by Thomas M. Hoenig in Federal Reserve Bank of Kansas City , June 2010

Speech at Bartlesville Federal Reserve Forum

How Not to Reduce Excess Reserves by David C. Wheelock in Federal Reserve Bank of St. Louis Economic Synopses , August 2009

The author looks back to a simliar economic situation during the 1930s for insights into how to handle excess reserves.

Implementing a Macroprudential Approach to Supervision and Regulation by Ben S. Bernanke in Federal Reserve Board of Governors Speech , May 2011

Speech at the 47th Annual Conference on Bank Structure and Competition, Chicago, Illinois

Implications of the Financial Crisis for Economics by Ben S. Bernanke in Board of Governors Speech , September 2010

Speech at the Conference Co-sponsored by the Center for Economic Policy Studies and the Bendheim Center for Finance, Princeton University, Princeton, New Jersey

Implications of the Financial Crisis for Potential Growth: Past, Present, and Future by Charles Steindel in Federal Reserve Bank of New York Staff Reports , November 2009

The scale of the recent collapse in asset values and the magnitude of the recession suggest that activities connected to the increase in values over the 2002-07 period—notably, expansion of the financial markets, homebuilding, and real estate—were overstated. If this is true, aggregate U.S. economic growth would have been overstated, implying that ...  

Improving the International Monetary and Financial System by Janet L. Yellen in Speech at the Banque de France International Symposium, Paris, France , March 2011

In this speech Yellen contributes her thoughts on steps we can take to improve our international economic order. In the case of the recent global financial crisis and recession, she apportions responsibility to inadequacies in both the monetary and financial systems.

The Information Value of the Stress Test and Bank Opacity by Stavros Peristiani, Donald P. Morgan, and Vanessa Savino in Federal Reserve Bank of New York Staff Reports, no. 460 , July 2010

We investigate whether the “stress test,” the extraordinary examination of the nineteen largest U.S. bank holding companies conducted by federal bank supervisors in 2009, produced information demanded by the market. Using standard event study techniques, we find that the market had largely deciphered on its own which banks would have capital ga...  

International Policy Response to the Financial Crisis by Masaaki Shirakawa in Federal Reserve Bank of Kansas City Symposium , August 2009

A discussion of the future of international coordination between central banks in the wake of the current financial crisis.

Is the Financial Crisis Over? A Yield Spread Perspective by Massimo Guidolin and Yu Man Tam in Federal Reserve Bank of St. Louis Economic Synopses , September 2009

Our finding is consistent with some recent, substantial volatility in the U.S. corporate bond market and leaves open a possibility that additional, future shocks to default premia may have long-lived effects.

It's Greek to Me by Kevin Warsh in Board of Governors Speech , June 2010

At the Atlanta Rotary Club, Atlanta, Georgia

The Lack of an Empirical Rationale for a Revival of Discretionary Fiscal Policy by John B. Taylor in AEA Presentation Paper , January 2009

Despite this widespread agreement of a decade ago, there has recently been a dramatic revival of interest in discretionary fiscal policy. The purpose of this paper is to review the empirical evidence during the past decade and determine whether it calls for such a revival. Taylor finds that it does not.

Lessons of the Crisis: The Implications for Regulatory Reform by William C. Dudley in Speech, Federal Reserve Bank of New York , January 2010

Remarks at the Partnership for New York City Discussion, New York City.

Liquidity Risk, Credit Risk, and the Federal Reserve’s Responses to the Crisis by Asani Sarkar in Federal Reserve Bank of New York Staff Reports , September 2009

In responding to the severity and broad scope of the financial crisis that began in 2007, the Federal Reserve has made aggressive use of both traditional monetary policy instruments and innovative tools in an effort to provide liquidity. In this paper, the author examines the Fed’s actions in light of the underlying financial amplification mechanis...  

The macroeconomics of financial crises: How risk premiums, liquidity traps and perfect traps affect policy options by Manfred Gärtner und Florian Jung in University of St. Gallen Discussion Paper , July 2009

The paper shows that structural models of the IS-LM and Mundell-Fleming variety have a lot to tell about the macroeconomics of the current global crisis. In addition to demonstrating how the emergence of risk premiums in money and capital markets may drive economies into recessions, it shows the following: (1) Liquidity traps may occur not only whe...  

Macroprudential Supervision of Financial Institutions: Lessons from the SCAP by Beverly Hirtle, Til Schuermann, and Kevin Stiroh in Federal Reserve Bank of New York Staff Reports , November 2009

A fundamental conclusion drawn from the recent financial crisis is that the supervision and regulation of financial firms in isolation—a purely microprudential perspective—are not sufficient to maintain financial stability. Rather, a macroprudential perspective, which evaluates and responds to the financial system as a whole, seems necessary, and t...  

The Mechanics of a Graceful Exit: Interest on Reserves and Segmentation in the Federal Funds Market by Morten L. Bech and Elizabeth Klee in Federal Reserve Bank of New York Staff Reports , December 2009

To combat the financial crisis that intensified in the fall of 2008, the Federal Reserve injected a substantial amount of liquidity into the banking system. The resulting increase in reserve balances exerted downward price pressure in the federal funds market, and the effective federal funds rate began to deviate from the target rate set by the Fed...  

Monetary Policy Research and the Financial Crisis: Strengths and Shortcomings by Donald L. Kohn in Speech, Board of Governors , October 2009

Kohn, in his speech, asks "What aspects of the existing literature in monetary economics have been particularly helpful in formulating the course of monetary policy since the onset of the financial crisis? Second, what are the gaps in this literature that have become particularly evident since the onset of the financial crisis and, therefore, would...  

Monetary Policy Stance: The View from Consumption Spending by William T. Gavin in Federal Reserve Bank of St. Louis Economic Synopses , October 2009

The author suggests that we should expect a third business cycle in succession in which the real federal funds rate reaches its trough well after the economy begins to recover

Mortgage Choice and the Pricing of Fixed-Rate and Adjustable-Rate Mortgages by John Krainer in Federal Reserve Bank of San Francisco Economic Letter , February 2010

In the United States throughout 2009, the share of adjustable-rate mortgages among total mortgage originations was very low, apparently reflecting the attractive pricing of fixed-rate mortgages relative to ARMs. Government policy could have changed the relative attractiveness of the fixed-rate mortgages and ARMs, thereby shifting the market share o...  

Negating the Inflation Potential of the Fed’s Lending Programs by Daniel L. Thornton in Federal Reserve Bank of St. Louis Economic Synopses , July 2009

The Term Auction Facility (TAF), instituted in December 2007, was the first in a series of Fed lending facilities designed to allocate credit (and thus liquidity) to certain institutions and markets. The most recent of these lending facilities is the Term Asset-Backed Securities Loan Facility (TALF), which began operation in March 2009. Initiall...  

The New Shape of the Economic and the Financial Governance in the EU by Olli Rehn in Institute of International Finance , October 2010

Keynote Speech by EU Economic & Monetary Affairs Commissioner at The Annual Meeting Institute of International Finance

On the Record with Bernanke in PBS NewsHour Forum , July 2009

At a forum in Kansas City, Mo., Federal Reserve Chairman Ben Bernanke discussed the central bank's actions in handling the economic crisis, saying he did not want to be the Fed chief who "presided over the second Great Depression." Here is the full transcript of the forum, which was moderated by Jim Lehrer.

Overview: Global Financial Crisis Spurs Unprecedented Policy Actions by Ingo Fender and Jacob Gyntelberg in BIS Quarterly Review , December 2008

A four-stage overview of the crisis. Market developments over the period under review went through four more or less distinct stages. Stage one, which led into the Lehman bankruptcy in mid-September, was marked by the takeover of two major US housing finance agencies by the authorities in the United States. Stage two encompassed the immediate impl...  

Paradise Lost: Addressing ‘Too Big to Fail’ (With Reference to John Milton and Irving Kristol) by Richard W. FIsher in Remarks before the Cato Institute’s 27th Annual Monetary Conference , November 2009

"In the words of Milton, I would say that regulation should be designed to enable financial institutions to be 'sufficient to have stood, though free to fall.'"

A Plan for Addressing the Financial Crisis by Lucian A. Bebchuk in Harvard Law School Working Paper , September 2008

This paper critiques the proposed emergency legislation for spending $700 billion on purchasing financial firms’ troubled assets to address the 2008 financial crisis. It also puts forward an alternative for advancing the two goals of the proposed legislation – restoring stability to the financial markets and protecting taxpayers.

Preventing Future Crises by Noel Sacasa in International Monetary Fund: Finance and Development , December 2008

This article takes a look at substantive issues in the current debates on reforming the financial sector. The first section identifies crucial weaknesses that the reforms need to address, and the second outlines key areas for policy action.

The Public Policy Case for a Role for the Federal Reserve in Bank Supervision and Regulation by Ben S. Bernanke in Board of Governors , January 2010

The Board's views on the importance of the Federal Reserve's continued role in bank supervision and regulation. The document discusses (1) how the expertise and information that the Federal Reserve develops in the making of monetary policy enable it to make a unique contribution to an effective regulatory regime, especially in the context of a more...  

Questions about Fiscal Policy: Implications from the Financial Crisis of 2008-2009 by N. Gregory Mankiw in Federal Reserve Bank of St. Louis Review , May 2010

This article is a modified version of remarks given at the Federal Reserve Bank of Philadelphia’s policy forum “Policy Lessons from the Economic and Financial Crisis,” December 4, 2009.

Rebalancing the Global Recovery by Ben S. Bernanke in Board of Governors , November 2010

Speech by the Federal Reserve Chairman at the Sixth European Central Bank Central Banking Conference, Frankfurt, Germany

Reflections on a Year of Crisis by Ben S. Bernanke in Federal Reserve Bank of Kansas City Symposium , August 2009

The opening remarks at the Jackson Hole conference, "Financial Stability and Macroeconomic Policy"

Regulating Systemic Risk by Governor Daniel K. Tarullo in Speech at the 2011 Credit Markets Symposium, Charlotte, North Carolina , March 2011

This speech addresses the implementation of the new statutory regime for special supervision and regulation of financial institutions whose stress or failure could pose a risk to financial stability.

The Regulatory Response to the Financial Crisis: An Early Assessment by Jeffrey M. Lacker in The Institute for International Economic Policy and the International Monetary Fund Institute , May 2010

Assessment of the regulatory response to this crisis will depend predominantly on how well it clarifies and places discernable boundaries around the federal financial safety net.

Remarks on "The Squam Lake Report: Fixing the Financial System" by Ben S. Bernanke in Board of Governors Speech , June 2010

At the Squam Lake Conference, New York, New York

Report on the Lessons Learned from the Financial Ccrisis with Regard to the Functioning of European Financial Market Infrastructures by European Central Bank in European Central Bank , April 2010

This report considers issues relating to the impact of the financial crisis on the functioning of European financial market infrastructures (FMIs), including systemically important payment systems, central counter parties, and securities settlement systems.

Resolution Process for Financial Companies that Pose Systemic Risk to the Financial System and Overall Economy by Thomas M. Hoenig, Charles S. Morris, and Kenneth Spong in Federal Reserve Bank of Kansas City Speech , September 2009

The Under current law, financial regulators do not have the authority to resolve financial holding companies and non-depository financial companies that are in default or serious danger of default as they have with depository institutions. Although the normal bankruptcy process is a very effective process for most non-depository financial companie...  

The Response of the Federal Reserve to the Recent Banking and Financial Crisis by Randall S. Kroszner and William Melick in Chicago Booth School of Business Working Paper , December 2009

The authors present an account of the policy actions taken by the Fed, providing a narrative that brings together information that otherwise requires consulting a variety of sources. They also present a framework for thinking about the central bank policy response that gives the reader a means of organizing her own understanding of the response. A...  

Rethinking Capital Regulation by Anil K. Kashyap, Raghuram G. Rajan and Jeremy C. Stein in Federal Reserve Bank of Kansas City's Symposium: Maintaining Stability in a Changing Financial System , September 2008

Recent estimates suggest that U.S. banks and investment banks may lose up to $250 billion from their exposure to residential mortgages securities. The resulting depletion of capital has led to unprecedented disruptions in the market for interbank funds and to sharp contractions in credit supply, with adverse consequences for the larger economy. A n...  

Second Chances: Subprime Mortgage Modification and Re-Default by Andrew Haughwout, Ebiere Okah, and Joseph Tracy in Federal Reserve Bank of New York Staff Reports , December 2009

Mortgage modifications have become an important component of public interventions designed to reduce foreclosures. In this paper, we examine how the structure of a mortgage modification affects the likelihood of the modified mortgage re-defaulting over the next year. Using data on subprime modifications that precede the government’s Home Affordable...  

Securitization Markets and Central Banking: An Evaluation of the Term Asset-Backed Securities Loan Facility by Sean Campbell, Daniel Covitz, William Nelson, and Karen Pence in Finance & Economic Discussion Series, #2011-16 , January 2011

This working paper studies the effects of the Term Asset-Backed Securities Loan Facility and finds that it lowered interest rate spreads for some categories of asset-backed securities but had little impact on the pricing of individual securities.

Seeking Stability: What's Next for Banking Regulation? by Simona E. Cociuba in Federal Reserve Bank of Dallas Economic Letter , April 2009

Cociuba reviews the Basel I regulatory framework, and then considers some of the improvements and shortcomings of Basel II. Cociuba then presents the example of Northern Rock to illustrate the shortcomings of Basel I, before considering what the future of bank regulation should look like.

Shadow Banking by Zoltan Pozsar, Tobias Adrian, Adam Ashcraft, Hayley Boesky in Federal Reserve Bank of New York Staff Reports no. 458 , July 2010

This paper documents the origins, evolution and economic role of the shadow banking system. Its aim is to aid regulators and policymakers globally to reform, regulate and supervise the process of securitized credit intermediation in a market-based financial system.

The Shadow Banking System: Implications for Financial Regulation by Tobias Adrian and Hyun Song Shin in Federal Reserve Bank of New York Staff Report , July 2009

The current financial crisis has highlighted the growing importance of the “shadow banking system,” which grew out of the securitization of assets and the integration of banking with capital market developments. This trend has been most pronounced in the United States, but it has had a profound influence on the global financial system. In a market-...  

Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007 by Gary B. Gorton in SSRN Paper , May 2009

The 'shadow banking system' at the heart of the current credit crisis is, in fact, a real banking system – and is vulnerable to a banking panic. Indeed, the events starting in August 2007 are a banking panic. A banking panic is a systemic event because the banking system cannot honor its obligations and is insolvent. Unlike the historical banking p...  

Speculative Bubbles and Financial Crisis by Pengfei Wang and Yi Wen in Federal Reserve Bank of St. Louis Working Paper , July 2009

Why are asset prices so much more volatile and so often detached from their fundamental values? Why does the bursting of financial bubbles depress the real economy? This paper addresses these questions by constructing an in?nite-horizon heterogeneous agent general equilibrium model with speculative bubbles. We characterize conditions under which st...  

Still More Lessons from the Crisis by William C. Dudley in Federal Reserve Bank of New York Speech , December 2009

Remarks at the Columbia University World Leaders Forum, New York, New York

Structural Causes of the Global Financial Crisis: A Critical Assessment of the ‘New Financial Architecture’ by James Crotty in University of Massachusetts Amherst Working Paper , August 2008

The main thesis of this paper is that the ultimate cause of the current global financial crisis is to be found in the deeply flawed institutions and practices of what is often referred to as the New Financial Architecture (NFA) – a globally integrated system of giant bank conglomerates and the so-called ‘shadow banking system’ of investment ban...  

The Success of the CPFF? by Richard G. Anderson in Federal Reserve Bank of St. Louis Economic Synopses , April 2009

Describes the Commercial Paper Funding Facility and its effect on the availability of commercial credit.

Systemic Risk and Deposit Insurance Premiums by Viral V. Acharya, João A. C. Santos, and Tanju Yorulmazer in Federal Reserve Bank of New York Economic Policy Review , October 2009

While systemic risk—the risk of wholesale failure of banks and other financial institutions—is generally considered to be the primary reason for supervision and regulation of the banking industry, almost all regulatory rules treat such risk in isolation. In particular, they do not account for the very features that create systemic risk in the first...  

Three Lessons for Monetary Policy from the Panic of 2008 by James Bullard in Federal Reserve Bank of St. Louis Review , May 2010

This article is a modified version of a presentation given at the Federal Reserve Bank of Philadelphia’s policy forum “Policy Lessons from the Economic and Financial Crisis,” December 4, 2009.

Toward an Effective Resolution Regime for Large Financial Institutions by Daniel K. Tarullo in Board of Governors Speech , March 2010

At the Symposium on Building the Financial System of the 21st Century, Armonk, New York

The U.S. Financial System: Where We Have Been, Where We Are and Where We Need to Go by William C. Dudley in Federal Reserve Bank of New York Speech , February 2010

Remarks at the Reserve Bank of Australia's 50th Anniversary Symposium, Sydney, Australia

U.S. Monetary Policy and the Financial Crisis by James R. Lothian in Federal Reserve Bank of Atlanta CenFIS Working Paper , December 2009

This paper reviews U.S. Federal Reserve policy prior to and during the course of the recession that began in December 2007. It compares those policies to monetary policy during the Great Depression of the 1930s, with which this recession has been likened. The paper then discusses what policymakers will need to do to in future to avoid a surge in in...  

Uncertainty About When the Fed Will Raise Interest Rates by Michael W. McCracken in Federal Reserve Bank of St. Louis Economic Synopses , June 2009

In response to the current economic crisis, the Federal Reserve has reduced its federal funds rate (FFR) target to zero. With the FFR at zero and a negative rate practically infeasible, the Fed is now in largely uncharted territory when conducting monetary policy. Other types of policies are now the focus of attention.

United States: Financial System Stability Assessment by The Monetary and Capital Markets and Western Hemisphere Departments of the International Monetary Fund in International Monetary Fund, IMF Country Report No. 10/247 , July 2010

A forceful policy response has rolled back systemic market pressures, but the cost of intervention has been high and stability is tenuous. Comprehensive reforms are being legislated, addressing many of the issues that left the system vulnerable. Given the severity of the crisis and the many weaknesses revealed, bolder action could have been envi...  

Using Monetary Policy to Stabilize Economic Activity by Carl E. Walsh in Federal Reserve Bank of Kansas City Symposium , August 2009

This essay examines the role of monetary policy in stabilizing real economic activity. The author discusses the consensus on monetary policy that developed over the last twenty years. He then examines monetary policy when the policy interest rate has fallen to zero. The paper also assess issues relevant for post-crisis monetary policy.

Valuing the Treasury’s Capital Assistance Program by Paul Glasserman and Zhenyu Wang in Federal Reserve Bank of New York Staff Reports , December 2009

The Capital Assistance Program (CAP) was created by the U.S. government in February 2009 to provide backup capital to large financial institutions unable to raise sufficient capital from private investors. Under the terms of the CAP, a participating bank receives contingent capital by issuing preferred shares to the Treasury combined with embedded ...  

A View of the Economic Crisis and the Federal Reserve’s by Janet L. Yellen in Federal Reserve Bank of San Francisco Economic Letter , July 2009

The Federal Reserve has responded to a severe recession by developing programs to bolster the financial system and restore economic growth. The Fed has the tools to unwind these programs when appropriate, maintaining price stability. The following is adapted from a speech delivered by the president and CEO of the Federal Reserve Bank of San Francis...  

What to Do about Systemically Important Financial Institutions by James B. Thomson in Federal Reserve Bank of Cleveland , August 2009

The Federal Reserve Bank of Cleveland is proposing a three-tiered system for regulating systemically important financial institutions. Tier one would include high-risk institutions, such as large, interstate banks and multi-state insurance companies. Tier two would include moderately complex financial institutions, such as larger regional banks. An...  

What's Under the TARP? by Craig P. Aubuchon in Federal Reserve Bank of St. Louis Economic Synopses , April 2009

This article provides an outline of the TARP plan and the Financial Stability Plan.

Where We Go from Here: The Crisis and Beyond by Richard W. Fisher in Federal Reserve Bank of Dallas Speech , March 2010

Remarks before the Eller College of Management, University of Arizona

Will Regulatory Reform Prevent Future Crises? by James Bullard in Federal Reserve Bank of St. Louis Speech , February 2010

Remarks at CFA Virginia Society, Richmond, Virginia

Will the U.S. Bank Recapitalization Succeed? Lessons from Japan by Takeo Hoshi and Anil K. Kashyap in NBER Working Paper , December 2008

The U.S. government is using a variety of tools to try to rehabilitate the U.S. banking industry. The two principal policy levers discussed so far are employing asset managers to buy toxic real estate securities and making bank equity purchases. Japan used both of these strategies to combat its banking problems. There are also a surprising number o...  

Would Quantitative Easing Sooner Have Tempered the Financial Crisis and Economic Recession? by Daniel L. Thornton in Federal Reserve Bank of St. Louis Economic Synopses , August 2009

The author examines the timing of the quantitative easing employed by the Federal Reserve.

Articles on Global financial crisis

Displaying 1 - 20 of 192 articles.

Can you make a compelling play about economics? The Lehman Trilogy tries – but ultimately comes up short

Alexander Howard , University of Sydney

Critics of ‘woke capitalism’ want to return to a time when money was the only value. But it never existed

Carl Rhodes , University of Technology Sydney

FTX and Binance: how latest crypto scandals could influence public opinion on digital currency regulation

Pepper Culpepper , University of Oxford

Financial crises damage people’s mental health – our global review shows who is worst affected

Ben Gibson , De Montfort University ; Jekaterina Schneider , University of the West of England , and Mark Forshaw , Edge Hill University

Bank CEOs set the tone from the top when it comes to risky behaviour — new research

Alper Kara , Brunel University London ; Artur Semeyutin , University of Huddersfield , and Said Kaawach , University of Huddersfield

Australia’s not likely to catch a cold, just a sniffle from China’s economic downturn

James Laurenceson , University of Technology Sydney

UK government wants to make pension pots bigger with riskier investments – but it faces big challenges

Alan Shipman , The Open University

The US role in the global financial system is changing – here’s how it could affect the world’s economy

Steve Schifferes , City, University of London

US banking failures: the role of big auditors in another financial crisis

Atul K. Shah , City, University of London

Digital bank runs: social media played a role in recent financial failures but could also help investors avoid panic

Daniel Beunza , City, University of London

Small businesses seek to avoid possible credit crunch as Federal Reserve raises rates once more

D. Brian Blank , Mississippi State University and Brandy Hadley , Appalachian State University

Soaring interest rates contributed to recent bank failures – and there could be more to come

John Whittaker , Lancaster University

Worst bank turmoil since 2008 means Federal Reserve is damned if it does and damned if it doesn’t in decision over interest rates

Alexander Kurov , West Virginia University

Silicon Valley Bank biggest US lender to fail since 2008 financial crisis – a finance expert explains the impact

William Chittenden , Texas State University

Austerity has its own life – here’s how it lives on in future generations

Sarah Marie Hall , University of Manchester

Banking reforms could make the UK a sustainable finance hub, but also threaten financial stability

Alper Kara , University of Huddersfield

Banking reforms expert Q&A: will relaxing the rules help the UK economy and what are the risks?

Robert Webb , University of Stirling

Retailers may see more red after Black Friday as consumers say they plan to pull back on spending – acting as if the US were already in a recession

Ayalla A. Ruvio , Michigan State University and Forrest Morgeson , Michigan State University

Bankers need to be personally liable to avoid future financial crises — new research

David Blake , City, University of London

How to understand what’s going on with UK mortgage rates

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Professor of Economics, UNSW Sydney

Senior Lecturer in Economics, The Open University

Director and Professor, Australia-China Relations Institute (ACRI), University of Technology Sydney

Visiting Fellow, Macquarie University Applied Finance Centre, Macquarie University

Professor of Banking and Finance, Brunel University London

Professor of Banking & Applied Economics, University of Stirling

Visiting Fellow, Crawford School of Public Policy, Australian National University

Professor of Economics, University of Sydney

Professor of Organisational Behaviour, Bayes Business School, City, University of London

Professorial Research Fellow, Melbourne Institute, The University of Melbourne

Professor, Accounting and Finance, City, University of London

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The 2007–09 global financial crisis witnessed colossal disruptions in asset and credit markets, massive erosions of wealth, and unprecedented numbers of bankruptcies. Six years after the crisis began, its lingering effects are still visible in advanced economies and emerging markets alike—this shows a clear need to improve our understanding of financial crises. In their forthcoming book, “Financial Crises: Causes, Consequences, and Policy Responses,” Stijn Claessens, M. Ayhan Kose, Luc Laeven, and Fabían Valencia provide a broad overview of the current research and bring together a number of studies on the causes and consequences of crises. This article provides brief answers to seven commonly asked questions about financial crises in light of the findings in their book.

Stijn Claessens, M. Ayhan Kose, Luc Laeven, and Fabián Valencia

• Question 1. What are the main factors explaining financial crises?

Financial crises can stem from problems of the private or public sectors’ balance sheets and have domestic or external origins. Irrespective of its origins, a financial crisis is often an amalgam of events, including substantial changes in credit volume and asset prices, severe disruptions in financial intermediation, notably a reduction in the supply of external financing, large scale balance sheet problems, and often a need for substantial government and international support.

Although crises can be driven by a variety of factors, they are often preceded by asset and credit booms. Busts, financial crises, and poor growth often follow such booms ( Figure 1 ). Given these types of associations, many theoretical and empirical studies have recognized the need to explain sharp movements in asset and credit markets. These studies have been able to identify some proximate causes, such as financial liberalization, productivity gains, and a variety of distortions, such as weak supervision and regulation, underpriced deposit insurance, and poorly designed safety nets. However, many puzzles remain in terms of what factors drive asset price bubbles and credit booms in the first place.

Coincidence of Financial Booms and Crises

(fraction of total, in percent)

Citation: IMF Research Bulletin 2013, 004; 10.5089/9781484378434.026.A003

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• Question 2. What are the major types of financial crises?

It is useful to classify crises into four groups: currency crises; sudden stops (in capital flows); debt crises; and banking crises. While there are many common causes, the available literature has also identified specific theoretical factors and empirical determinants of each type of crisis. It has sometimes been difficult to transform the predictions of theories into empirical applications, including practical ways to identify crises. While it is easy, for example, to design quantitative methods to identify currency crises and sudden stops, the identification of debt and banking crises remains typically based on qualitative and judgmental methods. The literature therefore employs a wide range of methods to identify and classify crises.

While there are issues with establishing a timeline, it is clear that financial crises are quite common and tend to cluster over time ( Figure 2 ). They also tend to hit small and large countries as well as poor and rich ones. History also shows that crises come in different shapes and sizes, evolve over time—with certain types being more important in some periods than others—and can rapidly spread across borders (as they did in the 2007–09 global financial crisis).

Average Number of Financial Crises over Decades

Irrespective of the classification used, different types of crises can often overlap. Many banking crises, for example, are associated with sudden stop episodes and currency crises. The overlap of multiple types of crises leads to further challenges for the identification of crises and examination of their underlying causes. For example, since banking and sovereign crises often coincide, it is difficult to answer definitively whether a banking crisis leads to a sovereign crisis or vice-versa.

• Question 3. What are the real and financial sector implications of crises?

Macroeconomic and financial implications of crises are typically severe, with many commonalities across various types. Recessions with large output losses are common to many crises. Other macroeconomic variables typically register significant declines as well. Financial variables, such as asset prices and credit, usually follow qualitatively similar patterns across crises, albeit with variations in terms of duration and severity. Besides their negative effects over the short run, financial crises often have adverse medium- to long-run effects on activity.

• Question 4. How severe are the medium- and long-term effects of crises?

The effects of financial crises on the real economy are quite persistent. Output tends to be depressed substantially and persistently following banking crises, with no rebound, on average, to the pre-crisis trend in the medium term. However, growth eventually returns to its pre-crisis rate for most economies. The depressed output path tends to result from long-lasting reductions of roughly equal proportions in the employment rate, the capital-to-labor ratio, and total factor productivity. In the short term, the output loss is mainly accounted for by total factor productivity losses, but, unlike the employment rate and capital-to-labor ratio, the level of total factor productivity recovers somewhat to its pre-crisis trend in the medium term.

• Question 5. What are the main policies to resolve banking crises?

The policies used to remedy the consequences of a banking crisis can be grouped into two sets. The first involves what are often called containment policies, which are deployed during the early stages of a banking crisis. This phase is often characterized by deteriorating sentiment on the viability of the financial system and the economic prospects of the country in the short term. It may involve runs on banks, on entire markets, and even runs on the domestic currency. Typically, at this stage it is difficult to tell whether the crisis reflects just liquidity shortages or solvency problems. In order to buy time to determine the true nature of the crisis, governments resort to policies such as emergency liquidity provision to banks, other financial intermediaries, and even entire markets. They often announce guarantees on bank liabilities and in extreme cases governments use deposit freezes and capital controls.

The second set of policies encompasses the resolution phase. By this stage governments have had time to design a plan to address solvency problems and enact any necessary changes in legislation or secured funding for the restructuring of the financial sector. This phase includes policies such as recapitalization of banks with public funds, closure of insolvent institutions, restructuring of viable ones, setting new institutional arrangements such as asset management companies, as well as restructuring of private debt.

Not all policies mentioned above are used in every crisis, but they are all the most common policies that are used in remedying the effects of a banking crisis. The effect of interventions on economic costs and the fiscal accounts depends, to a large extent, on the policy mix. The use of guarantees on bank liabilities can contain liquidity pressures on banks, for example, without involving a disbursement of public funds upfront, but with potentially substantial fiscal contingencies, although they may not necessarily materialize. In contrast, direct capital injections have a certain impact on the public purse upfront, but some of these resources can be recovered in the future when public shareholdings are returned to private hands. The timing of the policy mix can also affect the fiscal costs of a crisis. If macroeconomic policies are used to avoid a sharp contraction in activity, this may discourage more active bank restructuring that would allow banks to recover more quickly and renew lending, with the risk of prolonging the crisis and depressing growth for a prolonged period of time. This, in turn, can increase indirect fiscal and economic costs.

• Question 6. What is the importance of household debt restructuring as a tool to resolve crises?

The historically high levels of household debt in many recent crisis-hit countries heightened demands for government intervention. If unaddressed, household debt distress can be a drain on the economy and even lead to social unrest. Well-designed and well-executed government interventions may be more efficient than leaving debt restructuring to the marketplace and standard court-based resolution tools. Empirically, there is evidence that housing busts and recessions preceded by larger run-ups in household debt tend to be more severe and protracted. Government policies can help prevent prolonged contractions in economic activity by addressing the problem of excessive household debt. In particular, bold household debt-restructuring programs such as those implemented in the United States in the 1930’s and in Iceland in the aftermath of the global crisis can significantly reduce debt-repayment burdens and the number of household defaults and foreclosures.

• Question 7. Can future crises be avoided?

Banking crises have affected countries for centuries and history has been a great laboratory for academics and policymakers to study early detection of crises, their consequences on the real economy, and the effectiveness of policies used to resolve them. Progress has been made in all these directions, but not sufficiently to claim that they can be avoided at all costs. Nevertheless, important lessons have been learned about vulnerabilities, the role of excessive credit growth—perhaps the single most important predictor of a banking crisis—the role of excessive maturity mismatches, and excessive exposure to exchange rate risk. While not perfect, these lessons will be important in designing regulatory policies and reducing the incidence of crises in the future; one concrete example includes advances in the design of macropru-dential regulation.

However, just as the policy toolkit evolves, the nature of crises evolves as well. Complexity in financial markets and institutions makes the identification of vulnerabilities more challenging. Therefore, efforts on crisis prevention are important, but it is unlikely that they will ever reach a level of effectiveness as to eradicate crises completely.

Claessens , Stijn , M. Ayhan Kose , Luc Laeven , and Fabian Valencia , 2013 , Financial Crises: Causes, Consequences, and Policy Responses , ( Washington : International Monetary Fund ).

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Dell’ Ariccia , Giovanni , Deniz Igan , Luc Laeven , and Hui Tong , 2013 , “ Policies for Macrofinancial Stability: Dealing with Credit Booms and Busts, ” in Financial Crises: Causes, Consequences, and Policy Responses , edited by Stijn Claessens , M. Ayhan Kose , Luc Laeven , and Fabían Valencia . ( Washington : International Monetary Fund ).

Forbes , K. J ., and F . Warnock , 2012 , “ Capital Flow Waves: Surges, Stops, Flight, and Retrenchment, ” Journal of International Economics , Vol. 88 , No. 2 , pp. 235 – 51 .

Laeven , Luc , and Fabian Valencia , 2013 , “ Resolution of Banking Crises: The Good, the Bad, and the Ugly ” in Financial Crises: Causes, Consequences, and Policy Responses d , edited by Stijn Claessens , M. Ayhan Kose , Luc Laeven , and Fabían Valencia ( Washington : International Monetary Fund ).

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Financial Crisis in Management Stress: From the Perspective of Crisis Anxiety of Others

1 School of Economics and Management, Jiangxi Science and Technology Normal University, Nanchang, China

2 School of Business Administration, Guangdong University of Finance and Economics, Guangzhou, China

3 College of Management, Shenzhen University, Shenzhen, China

4 School of Government, Shenzhen University, Shenzhen, China

5 School of International Economics Trade, Jiangxi University of Finance and Economics, Nanchang, China

Associated Data

The raw data supporting the conclusions of this article will be made available by the authors, without undue reservation.

The crisis anxiety of others is a phenomenon that goes hand in hand with the spread of the occupational health pandemic. It is becoming increasingly important to better understand its emergence process, especially in the era of greater uncertainty. This study aims to examine the impact of the external financial crisis on managerial stress among financial employees. The sample consists of 347 senior managers and financial employees from companies in China. The empirical analysis shows that external financial crises have significant effects on anxiety levels, especially external corporate crisis, debt crisis and growth crisis both have mediating effect on the relationship between anxiety level and pressure management and the relationship between external financial crisis and pressure management. This study explores the rules for the emergence of anxiety among corporate managers and expands the scope of environmental factors that need to be discussed in the study of corporate financial management. This study provides theoretical implications for the psychological study of Financial Management and practical implications for corporate financial management.

Introduction

Fueled by economic globalization and the spread of the pandemic, contemporary enterprises are facing rapidly changing market competition. Considerable research has been conducted on how to timely grasp the advantages and disadvantages of corporate products or services, and dealing with various problems and challenges is an important topic for enterprises to gain absolute advantages. Contingency theory holds that the management behavior is self-correction and adjustment to strengthen environmental adaptability (Zhou and Liu, 2013 ). The environment mentioned here includes not only the social, economic, and cultural external environments faced by corporations, but also their factors that are “determined” due to management models or institutional norms (Franco, 2021 ). At the same time, in the context of the new era of the Internet Economy, the organizations encounter challenges from internal management governance and external pressure from marketing, including disruptions, risks and uncertainties arising from economic system reform, economic freedom improvement and capital investment increase (Mia and Clarke, 1999 ). From the perspective of market relations, enterprises are not independent individuals, and their development in all aspects is inseparable from the reference and comparison of the same-level external enterprises with similar strategic resources under the same market environment (Wang W. et al., 2020 ; Gibson et al., 2021 ; Sun and Li, 2021 ). Generally, the academic research on sustainable competitive performance is more focused on financial performance, technical innovation, and corporate social responsibility (Waheed et al., 2020 ; Li et al., 2021a , b ; Yi et al., 2022 ). However, limited research has been conducted on how to prevent risk and control behavior guidance for individuals (Yi et al., 2021 ), especially the employees in the financial industry who experience serious anxiety and health problem under the highly uncertain market situation. A large amount of practical experience shows that scarce, non-fully tradable, and hard-to-act resources of external enterprises have a significant impact on the internal management of enterprises (Severo et al., 2020 ), and such resources include tangible resources and intangible assets such as management, experience and modes that can produce better performance.

Existing literature on corporation risk management is largely focused on internal control-level, meanwhile, the external macro-environment is also considered to a certain extent, to improve the corporate's ability to adapting changes in the external environment. However, most of them ignore the relatively more important part of external factors, or the competing companies in the same industry, as these companies will provide rich experience and lessons in the financial crisis to cope with the ever-changing macro-environment of financial management for other corporations. While being alert to the corporate internal management, the psychological anxiety and emotional exhaustion will be inevitably brought to the middle and senior managers, therefore, causing management pressure. Specifically, when learning that external enterprises are in crisis, the corporate managers will inevitably have empathy or self-pity in the changing process with psychological pressure. This is pervasive in the current context of market competition, and the psychological problems presented when the managers face the pressure will aggravate the uncertainty and volatility of the subsequent corporate financial plans, policy choices, and decision making. Therefore, clarifying the path and mechanism of the external corporate financial crisis on the management stress and conducting follow-up stress control effectively and timely have become key factors for successful corporate management.

Okruszek et al. ( 2020 ) reports a positive relationship between crisis perception and emotional response and Yu et al. ( 2021 ) have further developed job insecurity from the negative emotions, which inspired this study. The COVID-19 pandemic has led enterprises worldwide to implement unprecedented response strategies for economic development. Both enterprises and employees are seriously affected, especially the corporate financial status and the financial personnel. Consequently, our research perspective is positioned in the external financial crisis, especially the impact on the psychological status and management behavior of financial management personnel. Thus, we designed this study to explore the causes of the crisis anxiety of others and make rational financial warnings by empirically examining the internal correlation between the external corporate financial crisis and corporate management. The finding of this study will provide theoretical implications for the psychological stress control of corporate financial employees and the empirical inter-disciplinary study of corporate management and psychology.

The remainder of this study is organized as follows. Section Literature Review and Hypotheses Development reviews the main literature and hypotheses developed based on the previous literature. Among them, we mainly introduce the causes of the external crisis and the psychological and behavioral processes that affect financial personnel, and further introduce the important roles of state anxiety and financial warning capability in this process. Section Methodology discusses our research methodology and specifically analyses the process, to examine our related hypotheses. Furthermore, we conclude with a discussion summarizing our results, propose the theoretical and managerial implications of our work, and present some of our reflections on future research.

Literature Review and Hypotheses Development

Crisis anxiety of others.

In the literature on social psychology, anxiety refers to an aimless subjective feeling of an individual in the face of potential threats and dangerous environments, and that excessive anxiety can affect their well-being in normal work and daily life (McDowell et al., 2020 ; Zhang et al., 2020 ; Ali et al., 2021 ; Secosan et al., 2021 ). In general, anxiety is divided into state anxiety and trait anxiety (Charles, 1972 ), and the former refers to a temporary and heterogeneous emotional state or response caused by the influence of a specific situation (Liu et al., 2021 ), and the latter focuses more on personality traits, and it is more stable than state anxiety. The State-Trait Anxiety Inventory Scale (STAI) is commonly used to assess the levels of individual state anxiety, and it has been widely applied on empirical clinical psychology (Näslund et al., 2017 ), psychosomatic disease (Hallit et al., 2018 ), psychotherapy and counseling (Ma et al., 2013 ). In real life, anxiety is not only concerned in psychology but also in many other disciplines. It is found that although STAI is widely used, many studies that applied the scale may cause psychological resistance in the respondents, and thus their willingness will be affected (Schaufeli et al., 2002 ). Therefore, Marteau and Bekker ( 1992 ) selected the questions highly related to the scale from the presence and absence of anxiety and formed the Short State Anxiety Inventory (SSAI). The existing applications mostly focus on the impact of state anxiety on cognition, behavior, and interpersonal relations of human beings as well as countermeasures and suggestions. Numerous studies have confirmed that conflicts between peers and rejection by peers can cause individual loneliness and the longer the anxiety in this negative relationship, the greater the aggressive behavioral tendency (Dittrick et al., 2013 ). Later scholars identify that state anxiety negatively affects human working memory and productivity by limiting working memory capacity and interfering with the filtering of effective information (Ward et al., 2020 ; Deng et al., 2022 ; Duan et al., 2022 ). With more convenient information circulation, external corporate crisis brings anxiety to the corporate managers repeatedly, and such anxiety profoundly affects the corporate development and management and has a greater impact on financial work. Bearing this in mind, this study focuses on interpersonal activities and the information dissemination process to explore the causes of crisis anxiety of others.

For modern enterprises, finance is their pivot, and financial security is an important premise for them to carry out financial and operating activities continuously. In previous studies, the academia mainly paid attention to corporate financial security problems, analyzed the influences of market changes, capital structure, cash flow capacity, and capital price on corporate financial practices (Huang and Yen, 2019 ), and discussed the internal mechanism of learning good external corporate systems and taking warnings from poor systems. However, the existing studies ignored the transmission effect of the incident itself, that is, the crisis is of abruptness and destructiveness, causing emotional fluctuations and adverse social effects. In the context of crisis, the most significant point in the financial management work is the behavioral bias through the external corporate financial crisis, which intensively embodies the management stress and crisis anxiety of others. In this study, crisis anxiety of others has the following connotation: witnessing the occurrence of the external corporate crisis, the managers encounter a temporary and differentiated emotional state and aimless subjective feeling in the face of potential threats and a dangerous environment in the existing management work. Such subjective feelings are generally regarded as state anxiety, or management stress related to financial security issues in corporate financial management.

External Financial Crisis and State Anxiety

When the environment is abnormal, people's minds will send out a kind of warning signal at the early stage, namely, anxiety (Han et al., 2015 ). In daily operation management, anxiety generally stems from the interaction of internal and external factors. The internal factors include the formulation and implementation of the internal control system, and the external ones refer to the objective environmental factors not transferrable by the will of the enterprise, such as industrial market environment, competitive corporate management mode, economic and industrial policy (Lang and Stulz, 1992 ), among which the influences of internal and external factors are particularly prominent in corporate financial management. Specifically, enterprises with low-quality internal control may have irrational emotions in making financial decisions, especially anxiety, panic and other negative emotions that will affect the formulation and implementation of corporate strategies (Yeh and Liao, 2020 ). The corporate cash flow and investment turnover may also be affected due to financial structure problems of external enterprises, falling into a debt crisis (Onsongo et al., 2020 ). On the other hand, industries with a poor competitive environment will disperse their market forces and monopoly profits, which will increase cash flow volatility and bankruptcy risk of the enterprises. The financial problems of the competitive enterprises in the same sector will become the “alert signal” for the whole industry to force the managers to take their internal financial problems more seriously and produce a certain degree of the crisis anxiety of others.

Low management efficiency and fierce market competition are the main internal and external causes of the corporate financial crisis (Hertzel and Officer, 2012 ). If the enterprise has poor operating conditions, serious debt defaults, investment problems and a continuous net outflow of cash flows (Ruan and Liu, 2021 ), it is more likely to have a financial crisis and take corresponding crisis response measures. After the external corporate financial crisis is exposed, the negative incident as a signal will attract the attention of the industrial investors and competitors, and in a short time, it will affect the judgment of the enterprise and the value of the whole industry. It sends a signal that the market development of the industry is depressed, which will affect the corporate market competitiveness and even the whole industrial sector. As the enterprise faces more market pressure, the managers will inevitably have the anxiety that crisis anxiety of others will affect the formulation and implementation of their management decisions (Dionne et al., 2018 ). Due to the high speed, strong urgency, and unpredictability of the crisis, coupled with the rapid evolution of the crisis state, the negative sentiment in the industrial sector constantly spreads and forces managers to overreact (Kalmbach et al., 2020 ) and make impulsive adjustments or changes to the decisions and systems related to the crisis. In corporate financial management, the key references for corporate management mostly exist in the financial relationships between enterprises and suppliers, customers, employees, and creditors. When external enterprises fall into financial crisis, these financial relationships that maintain the survival of enterprises will be damaged, resulting in indirect financial crisis costs and even secondary transmission of information that will affect the operation and management of competitive enterprises in the same industrial sector. The enterprise involvement and the external corporate financial crisis will inevitably impact on industrial development. A little carelessness may produce a series of chain reactions, bring oppressive pressure management, and affect the normal corporate operation. Thus, the present study proposes the following hypotheses:

• Hypothesis 1: The operational crisis of external enterprises has a significant positive impact on state anxiety .
• Hypothesis 2: The debt crisis of external enterprises has a significant positive impact on state anxiety .
• Hypothesis 3: The growth crisis of external enterprises has a significant positive impact on state anxiety .

State Anxiety and Management Stress

Anxiety is a common negative emotion in daily life. When people feel anxious, they tend to make bad decisions or delay decision-making, which has a strong negative impact on daily management (Gino et al., 2012 ). The anxiety accompanies corporate financial management, and the state anxiety is essentially the emotional reaction brought about by individual self-discrepancy. At work, the managers often compare with social standards, and self-discrepancy occurs when the ideal criteria are not met (Cheung, 1997 ). Such discrepancy will bring an individual a negative state, namely anxiety. As Waheed et al. ( 2020 ) assumed, the enterprise is a complex system composed of environment, managers, and employees. Furthermore, the changes in the external environment will disrupt the normal working behavior of the employees. While the changing external environment brings about increased work demand, it is bound to disrupt the normal work order of the employees.

As a negative mood, state anxiety will occupy more cognitive resources of employees and consume limited self-control resources. Previous studies have adopted this theory from different perspectives. For example, Gonzalez and Winkler ( 2019 ) confirmed in their study that when a crisis occurs, individuals first make cognitive judgments of various incidents. Due to various complicated situations and all-inclusive information, people's understanding of the incident is affected by multiple factors, and the cognitive judgment is usually one-sided. Lwin et al. ( 2020 ) further inferred that this one-sided cognition will cause people to refuse to face the reality, produce negative emotions and passively adapt to the current situation, and thus anxiety will be aroused. From the perspective of individuals, Norris et al. ( 2020 ) found that the occurrence and development of a financial crisis are usually accompanied by some related issues, which will easily cause the individuals in similar situations or with the same emotions to “put themselves in others' position”. This will lead the existing negative emotions deep in their brain to affect the judgment of the incident itself through the “historical memory”. Hannah et al. ( 2021 ) report that the crisis is not just a simple accidental incident, and the management diagnosis and operational risks it triggers are the “clusters” of emotions and contradictions, which may lead to the corporate trust crisis or major management stress driven by various complex environments and conflicts of interest. Accordingly, the present study makes the following hypothesis:

• Hypothesis 4: State anxiety has a significant positive effect on management stress .

When a crisis event occurs, the evaluation and judgment of the external surrounding environment and the mistakes of the external corporation will affect the emotional response of employees, and the emotional response will not only affect the physical and mental health, but also further affect the employees' communication attitude and behavior (Yu et al., 2021 ). The outbreak of an external financial crisis increases the corporate uncertainty and ambiguity in the industrial sector, and even causes the managers to subjectively rationalize the fuzzy information. In an external financial crisis characterized by obstructed information and negative emotions, rumors are spread to a certain extent driven by negative emotions (Tse and Bond, 2021 ), which may cause corporate managers and employees to have more serious anxiety and frustration. Although it is a normal phenomenon that negative events cause negative emotions, the evolution process and direction of negative emotions in corporations are worth pondering. In the group, negative emotions are constantly amplified in the development and evolution of events, and this anxiety has a typical “resistance” (Wang et al., 2021 ). If it is not channeled and resolved in a timely and effective manner, it may hinder future corporate development planning. Fast and instant response is the basic requirement for corporate development in this era, and the external financial crisis subjects industrial competition and corporate business to great changes. Alarmed by the crisis warning from external enterprises to some extent, the managers carefully examine the problems existing in their enterprise and have a clear and rational understanding of the actual condition, in order to timely reflect and reduce the possibility of a financial crisis. The present study argues that state anxiety strengthens the rational cognition and perceptual moods and proposes the following hypotheses:

• Hypothesis 5: State anxiety mediates the relationship between the operational crisis of external enterprises and management stress .
• Hypothesis 6: State anxiety mediates the relationship between debt crisis of external enterprises and management stress .
• Hypothesis 7: State anxiety mediates the relationship between the growth crisis of external enterprises and management stress .

Moderating Role of Financial Warning Capability

A notable managerial practice shows that making accurate warnings and preventing corporate financial crisis is an important part of corporate management, and it is the prerequisite for the management to adjust managerial strategies, investment decisions, and financial policies, and to protect the interests of investors and creditors (Broz and Ridzak, 2017 ). The ultimate value of the financial warning system is in the timeliness and effectiveness of the warning information to let the decision-makers and managers take corresponding timely countermeasures (Jemović and Marinković, 2021 ). High-level financial warning capability cannot be bought and sold through market transactions like other production factors, that is, they are non-tradable (Samitas et al., 2020 ), and it is easy to build high-quality continuous barriers to competition. Therefore, the impact of external financial crisis events is similar to other public crisis events (Bergmann and Müller, 2021 ), which expose the public to uncontrollable potential threats and generate negative emotions such as anxiety in their hearts (Wang et al., 2019 ). These emotions will further affect public cognition and behavior, and their effects will gradually accumulate (Bussiere and Fratzscher, 2006 ). Tong ( 2020 ) points out that the financial distress prediction that is difficult to imitate is the core competitiveness that corporate managers gradually cultivate and enables them to quickly adapt to and utilize the changes in the long and complicated process.

Overall, the financial warning can effectively monitor the changing trend of corporate financial situation to predict the financial crisis in advance (Xu et al., 2015 ), make an in-depth analysis of the root causes of the crisis, and assist corporate managers to take effective measures to prevent the crisis, and realize sustainable, stable, and healthy corporate development. The hidden crises in all aspects of the enterprise are the easiest to be disclosed through financial indicators, and a financial warning is the best entry point and the top priority for enterprises to carry out comprehensive crisis management. By analyzing the effectiveness of the financial warning system, Wang and Li ( 2021 ) indicate that although the financial warning is an indispensable part of the financial management system, not all the enterprises that are carrying out financial warning work can consciously develop this ability. An internal operation mechanism that is scattered, incomplete, and even lacking important and key links will not only make the financial warning system not function normally, but also cause problems to the financial warning, such as sending out wrong warning signals (Sarlin and Von Schweinitz, 2021 ), and harm corporate operation and management. The relevant managers who have the financial warning capability can take targeted response plans to solve the existing problems, avoid the gradual deterioration of the corporate financial situation and operating results, and ensure that the production and operation are in an orderly correction and on the right track (He et al., 2019 ).

In general, most of the research on corporate financial warning management stay at the level of establishing a financial warning system, while there is a lack of organic connections between various components. Besides, it is difficult to form a set of financial warning capability in the true sense (Flink and Chen, 2021 ). The construction of the financial warning system shall not be separated from other parts of the corporate management system as its single and isolated design and formulation will damage the prediction effect of the probability of financial crises (Helfat and Peteraf, 2015 ). A complete set of decision-making and enforcement mechanisms is largely the result of the combination of corporate governance and decision-making (Kim and Ko, 2020 ). Accordingly, the present study puts forward the following hypothesis:

• Hypothesis 8: Financial Warning Capabilities Moderate the Relationship Between the Financial Crisis and Management Stress .

The research framework of this study is shown in Figure 1 . The main hypothesis aims to explore the effects of the external corporate financial crisis on the management stress of employees in the financial industry. The empirical analysis reveals that external financial crisis has significant effects on state anxiety, in particular, external corporate operating crisis, debt crisis and growth crisis moderate the relationship between state anxiety and pressure management, and the mediating the relationship between the external financial crisis and pressure management.

Research framework.

Methodology

Data collection.

Based on the context requirements of the research objectives, this paper selected senior managers and employees engaged in financial affairs as the subjects, among them, the sample comes from the service and the manufacturing industry. The industries with relatively more distribution are the Internet, hardware manufacturing, consulting and education training, wholesale, and retail, with relatively wide coverage and a certain scientific and representative nature. We sent out questionnaires offline and online from September to December 2020, and altogether collected 376 questionnaires within 3 months, including 347 effective questionnaires acquiring a 92.29% effective rate. According to the statistical characteristics of the questionnaires (see Table 1 ), the gender ratio is nearly 1:1, with 180 men accounting for 51.87%; the subjects aged 31–45 account for the largest proportion, namely, 50.43%; in terms of corporate types, private enterprises account for 53.89%, followed by state-owned enterprises accounting for 26.80%; the subjects having worked for 5–10 years account for 39.48%, followed by for more than 10 years accounting for 32.85%; the subjects holding a bachelor's degree and above account for 60.81% and those with a master's degree accounting for 21.32%.

Descriptive statistics.

The data comes from a questionnaire survey of 347 financial personnel .

Analysis Tools

The questionnaire of this study includes two parts, individual public traits, and public cognition. Referring to the relatively mature scale in previous studies and setting the measurement scale in combination with the research topic. The questionnaire adopts the five-point Likert scale following the previous literature (Li and Katsumata, 2020 ; Wang and Yi, 2020 ; Yi et al., 2020 ), with four theories including the external financial crisis, state anxiety, stress management, and financial risk warning. Three indicators of the external financial crisis are measured using models established by Altman et al. ( 1977 ) and Holzhauer et al. ( 2016 ), and the respondents are asked to recall financial crisis-related experiences and indicate the level of recognition (e. g., excessive debt stress from external enterprises severely affects the financial position and operational management of the business), and the Cronbach's α value of the operational crisis, debt crisis, and growth crisis of external enterprises is 0.905, 0.885, and 0.887 respectively. State anxiety is measured by combining the STAI scale and SSAI, and the respondents are asked to ponder over psychological and emotional problems when experiencing an external financial crisis, for example, the financial crisis of external enterprises brings negative emotions, such as severe panic and annoyance (Spielberger, 1972 ; Marteau and Bekker, 1992 ; Spielberger and Reheiser, 2009 ), and the Cronbach's α value of state anxiety is 0.885. The management stress was measured by combining the scales proposed by Williams and Cooper ( 1998 ) and Cavanaugh et al. ( 2000 ). The respondents are asked to recall management issues at the time of an external financial crisis, for example, stress can be translated into internal values and motivation through necessary measures to improve organizational performance), and the Cronbach's α value of the management stress is 0.881. The predicting financial distress is measured by combining the index system of Altman ( 2013 ), the respondents are asked to ponder over the usefulness and feasibility of the financial warning system for handling the financial crises (e. g., predicting financial distress can effectively reduce the incidence of the financial crisis), and the Cronbach's α value of the predicting financial distress is 0.891. Besides, SPSS26.0 software is used for the validity test and the KMO value of the overall scale is 0.872 (>0.8). The results show that the reliability and validity of the scales are quite good, indicating there exists reliability of internal consistency among the variables. In this study, structural equation modeling (SEM) was conducted by SPSS.

Data Analysis

This study conducted a confirmatory factor analysis (CFA), and the results are shown in Table 2 , indicating that the standard loading of each factor is between 0.778 and 0.885, all > 0.7; the composite reliability is between 0.901 and 0.921, all > 0.7; and the average variance extracted is between 0.660 and 0.767, all > 0.6. The results of the confirmatory factor analysis in this study all met the criteria, with good convergent validity.

Confirmatory factor analysis.

The data comes from a questionnaire survey of 347 financial personnel and the items refer to existing measurement scales, such as STAI and SSAI. OC, operational crisis; DC, debut crisis; GC, growth crisis; SA, state anxiety; FC, financial warning capability; MS, management stress; and ***p < 0.001 .

The discriminant validity of the measurement model is analyzed and the results show a significant correlation among the variables ( p < 0.01), the absolute values of the correlation coefficient are all <0.5, which are all smaller than the corresponding AVE square root, indicating that the discriminant validity of the scale data is ideal ( Table 3 ).

Discriminant validity.

A modified mediating model has been set up in this study (see Figure 2 ) to further verify the research hypotheses presented above. As shown in Table 4 , the results indicate that the operational crisis of external enterprises has a significant impact on state anxiety, the path coefficient is equal to 0.402, CR = 4.235, and p < 0.05; The debt crisis of external enterprises has a significant impact on state anxiety, the path coefficient is equal to 0.365, CR = 4.083, and p < 0.05; the growth crisis of external enterprises has a significant impact on state anxiety, the path coefficient is equal to 0.390, CR = 4.546, and p < 0.05, thus Hypothesis 1, 2, and 3 are all verified; state anxiety has a significant impact on management pressure, the path coefficient is equal to 0.458, CR = 4.955, p < 0.05, thus Hypothesis 4 is verified.

Structure model.

Hypothesis testing.

*p < 0.05; **p < 0.01 ;

The goodness-of-fit testing was conducted to affirm the structural model, and the results are shown in Table 5 . Comparing the suggested values of each index with the actual results of this study, each index meets the basic standards. Overall, the fitting indices of this study meet the requirements, indicating that the structural model of this study is acceptable, the goodness-of-fit is satisfactory, and the study results are acceptable.

Goodness-of-fit of the structural model.

To further ensure the reliability of the research results and examine the mediating effect of state anxiety, the Bootstrap test has been performed with 5,000 samples, and a 95% confidence interval has been selected. The results are shown in Table 6 . The total effect is significant ( r = 0.402, SE = 0.120, z = 3.350, p < 0.05), and at the 95% confidence interval, the confidence interval generated with the Bias-corrected estimation method is (0.119, 0.425); the indirect effect is significant ( r = 0.184, SE = 0.050, z = 3.680, p < 0.05), and at the 95% confidence interval, the confidence interval generated with the Bias-corrected estimation method is (0.034, 0.159); the direct effect is not significant ( r = 0.218, SE = 0.120, z = 1.817, p > 0.05), and thus supported the mediating effect of state anxiety on the operational crisis and management stress of external enterprises, and it is fully mediating, and H5 is established. Similarly, H6 and H7 are all verified and are fully mediating.

Empirical testing of mediating effects.

In this study, the independent and moderating variables are decentralized, and the interaction term of state anxiety and financial warning capabilities is constructed and validated together with the original model to test the moderating effect of predicting financial distress, as shown in Table 7 . After being corrected, the interaction coefficient of state anxiety and predicting financial distress is −0.370, p < 0.05, indicating that the financial distress prediction has a significant negative mediating effect on state anxiety and pressure management. However, as shown in Figure 3 , with low financial distress prediction, state anxiety has more significant effects on pressure management, thus Hypothesis 8 is verified.

Moderating effect testing.

Interaction term of SA and MS .

Mediating role of financial warning capability.

Discussion and Implications

This study aims to construct the conceptual model of the financial crisis of the external enterprise affecting the management stress and explore how it affects the state anxiety under the mediation of the financial warning and further affects the management stress of employees in the financial industry. Through theoretical exploration and empirical analysis, the following conclusions are drawn.

First, the external financial crisis has a significant positive impact on state anxiety. Specifically, the operational crisis, debt crisis, and growth crisis of external enterprises all have a significant impact on state anxiety, and the degree of impact is relatively similar. The research results are consistent with those of Onsongo et al. ( 2020 ) and Ruan and Liu ( 2021 ), conforming the actual market circumstance. Corporate financial managers tend to pay attention to the management status of external enterprises to review their management ability and examine their market competitiveness, and the enterprises may need to re-examine the strategies already formulated and adjust the strategic direction in time to make up for the side effects caused by the financial crisis.

Second, state anxiety has a significant positive effect on pressure management. The results are consistent with those of Norris et al. ( 2020 ) and Hannah et al. ( 2021 ), conforming to the real logic. Crises will break the psychological balance of the managers, cause state anxiety and changes in their cognitive response process, resulting in the decline of thinking and judgment ability, unable to effectively resolve environmental interference, and leading to frustration in adaptation to the market circumstances and pressure management.

Third, state anxiety plays a mediating role in the impact of the external financial crisis on pressure management. The research results are the same as those of Tse and Bond ( 2021 ) and Wang et al. ( 2021 ), which are in line with the corporate actual situation. The financial crisis is not a static and independent incident, but an integral and dynamic process. State anxiety itself will occupy more corporate cognitive resources, which will affect the input of the employees and increase the management stress of managers.

Fourth, under different financial warning capabilities, there are significant differences in the impact of the financial crisis on pressure management. The research findings are consistent with those of scholars including Tong ( 2020 ) and Wang and Li ( 2021 ), conforming to the real context. While the financial crisis of external enterprises brings stress to the financial managers, it has a prominent warning and enlightening function, and enhancing the financial distress prediction is bound to reverse the impact of the financial crisis of external enterprises.

The external financial crisis events have shown a certain performance of the times. The financial crisis is not a static and independent event, but an overall and dynamic development process. This study can better understand the public's perception and how managers respond to crises and reduce management pressure. The results of the survey sample provide strong insights for our study. Therefore, this study is of great significance to the research and events of the applied psychology of corporate management.

Theoretical Implications

Our findings have made important theoretical implications. Although the past research results show that there is a significant positive relationship between the financial crisis and management pressure (Huang and Yen, 2019 ), however, related research in management and psychology is relatively narrow, even if the topic of the financial crisis has been studied for many years, studying how the emotions and behaviors affecting financial personnel from the external crisis perspective are also known. Even people will argue that we have a good understanding of the financial crisis, which can prevent or even avoid it. However, such a statement is likely to be wrong. Our research shows that the external enterprise crisis will release signals, enabling financial personnel from other companies in the industry to be highly nervous and anxious, which will affect their management decisions.

This study provides a convincing research perspective for the research on the financial crisis, covering internal control and the external competitors. First, this study contributes to the literature research on the external financial crisis affecting management stress by identifying status anxiety as an important influencing factor of pressure management. The results show that state anxiety deserves the attention of researchers and practitioners, which is an effective way to reduce management stress and “restart” employees' working enthusiasm and efficiency during the special period of accelerating economic globalization. It is shown in this paper that a financial crisis in external enterprises will bring different levels of anxiety to financial managers and related employees and increase the management's operation and managerial pressure.

Second, this paper proposes that state anxiety is the mediating factor for the impact of the external financial crisis on pressure management. State anxiety brings certain psychological expectations to the management to use the existing corporate resources to reduce the emergence of negative emotions and inject positive energy into the employees and enterprises. Previous studies focused on exploring the relationship between state anxiety and crisis (Loriette et al., 2019 ), state anxiety and management stress (Wang X. et al., 2020 ), and crisis and management stress (Turgaeva et al., 2020 ). The present study defines the mediating role of state anxiety in external financial crisis and pressure management, which is a beneficial supplement to previous studies.

Additionally, this paper demonstrates the moderating role of financial distress prediction in the impact of state anxiety on pressure management. If the enterprise has a high financial distress prediction, it will effectively supervise the changing trend of its financial situation when facing the crises of others, and predict the financial crisis in advance, which will help to relieve the stress of the management facing financial crises and enhance its market competitiveness. Moreover, many studies have focused on exploring the direct role of financial distress prediction (Wu et al., 2021 ), and this paper is a further extension of this series of studies.

Managerial Implications

In line with regularity exploration, this paper puts forward the following practical implications for future corporate financial management. First, senior managers need to pay attention to the prospects of the industrial sector and external market competition. Enterprises in the market competition strive for survival in the present time and development in the future, so they need to fully grasp the market competitive environment. In the “industrial scenario” analysis, starting with the competitive intensity in the global prediction “scenario” (Gauger et al., 2021 ), the enterprises should accurately make expected positioning and consider refining the factors affecting the uncertainty, source of competitive advantage, and possible actions of competitors by employing analysis. The enterprises should consider the competitive intensity of the industry as well as its competitive status in the industry. It should be noted that enterprises in the same industry will not only have conflicts in their products and profits, but also form a competitive relationship in terms of obtaining external financing and consumers. To better understand the external risks of industrial competition, it is necessary to clarify the transmission process of strengthening and adjusting the corporate competitive status, accurately study and judge the financial crisis and possible harms and make timely and forward-looking warnings.

Second, the enterprises need to improve their financial distress prediction and internal control system. The financial warning system has its features, which can use the data format to set up the crisis warning mechanism and have insight into the risks existing in the internal and external corporate environment. Organizations can prevent crises with two approaches. One is the corporate warning system. The enterprises should set up a comprehensive warning mechanism, and set up risk warning indicators for material production, sales, and other related departments taking into account profitability, solvency, economic efficiency, corporate development potential, financial flexibility, profitability, debt management, and other financial risks (Kuang et al., 2019 ), and set the warning values to which the indicators belong in line with the corporate characteristics. Second, this study advances the literature on financial warning mechanisms. The warning mechanism should be set up in line with financial indicators, and thus a tight system is expected to be formed to effectively prevent the enterprise from a financial crisis.

In addition, pertinent employees need to adjust their anxieties and control the corporate pressure management. As financial crises in an individual enterprise or the same industry occur, the negative sentiment of the relevant employee increases, the market becomes vulnerable and sensitive, and the butterfly effect caused by the uncertainty of the financial crisis may lead to huge market volatility and corporate turbulence. The enterprise should dynamically grasp the anxiety of employees, customize psychological checkups, and provide a stable and formal communication platform and media as well as emotional or instrumental support for employees, which can relieve the management stress induced by anxieties.

As a financial manager, controlling pressure management is not eliminating the pressure source, but mastering the right work feedback method, abandoning the subjective decision, such as experience and “taking the head”, enhancing the ability of relevant personnel to understand the crisis, analyze the crisis and prevent the crisis. In addition, attaching importance to employee emotional management, enhance employee's mental knowledge reserves to respond to negative emotions and work pressure, and effectively enhance the belongingness. Based on the important position of financial personnel in the prevention of financial crisis, training for financial personnel should not be limited to accounting continuing education, but also improve its quality, master the crisis management theory, and accurately analyze the external environment and changes. It is possible to make prevention measures to reduce the possibility of a financial crisis.

Limitations and Future Research

In this paper, the mechanism of management stress induced by the financial crisis of external organizations are identified and further verified the generation law of the crisis anxiety of others. Our work has some limitations and provides future research directions. First, in the current research, the sample data is limited to China's region, and the sample coverage still has certain limitations. Whether the research conclusions are universal needs to be further investigated; second, as the sample data are questionnaire-based, the data source is not diverse. Future studies can further infer the relationship between variables with corresponding respective semi-structural interviews and experimental methods. Despite the mediation role of state anxiety being explored, the negative impact is also investigated. Whether state anxiety will lead to active behavior and performance is still unclear, future research can be conducted to test the role of state anxiety in different fields and different contexts. Finally, the current research results are more prominent in specialized industries (non-monopoly industries), such as accounting and auditing.

Data Availability Statement

Ethics statement.

The studies involving human participants were reviewed and approved by Shenzhen University. The patients/participants provided their written informed consent to participate in this study. Written informed consent was obtained from the individual(s) for the publication of any potentially identifiable images or data included in this article.

Author Contributions

BL contributed to the empirical work, the analysis of the results, and the writing of the first draft. JZ significantly supported the overall work of this article. BW and YW supported the work of BL and JZ. FS contributed to the overall quality, supervised the literature organization, and empirical work. All authors discussed the results and commented on the manuscript.

This study was supported by National Natural Science Foundation of China (No. 71772128), Social Science Planning General Project in Jiangxi Province (No. 21JY17), and Social Science Young Project in Jiangxi Province (No. 21JY54).

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher's Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

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Research Topics & Ideas: Finance

120+ Finance Research Topic Ideas To Fast-Track Your Project

If you’re just starting out exploring potential research topics for your finance-related dissertation, thesis or research project, you’ve come to the right place. In this post, we’ll help kickstart your research topic ideation process by providing a hearty list of finance-centric research topics and ideas.

PS – This is just the start…

We know it’s exciting to run through a list of research topics, but please keep in mind that this list is just a starting point . To develop a suitable education-related research topic, you’ll need to identify a clear and convincing research gap , and a viable plan of action to fill that gap.

If this sounds foreign to you, check out our free research topic webinar that explores how to find and refine a high-quality research topic, from scratch. Alternatively, if you’d like hands-on help, consider our 1-on-1 coaching service .

Overview: Finance Research Topics

• Corporate finance topics
• Investment banking topics
• Private equity & VC
• Asset management
• Hedge funds
• Financial planning & advisory
• Quantitative finance
• Treasury management
• Financial technology (FinTech)
• Commercial banking
• International finance

Corporate Finance

These research topic ideas explore a breadth of issues ranging from the examination of capital structure to the exploration of financial strategies in mergers and acquisitions.

• Evaluating the impact of capital structure on firm performance across different industries
• Assessing the effectiveness of financial management practices in emerging markets
• A comparative analysis of the cost of capital and financial structure in multinational corporations across different regulatory environments
• Examining how integrating sustainability and CSR initiatives affect a corporation’s financial performance and brand reputation
• Analysing how rigorous financial analysis informs strategic decisions and contributes to corporate growth
• Examining the relationship between corporate governance structures and financial performance
• A comparative analysis of financing strategies among mergers and acquisitions
• Evaluating the importance of financial transparency and its impact on investor relations and trust
• Investigating the role of financial flexibility in strategic investment decisions during economic downturns
• Investigating how different dividend policies affect shareholder value and the firm’s financial performance

Investment Banking

The list below presents a series of research topics exploring the multifaceted dimensions of investment banking, with a particular focus on its evolution following the 2008 financial crisis.

• Analysing the evolution and impact of regulatory frameworks in investment banking post-2008 financial crisis
• Investigating the challenges and opportunities associated with cross-border M&As facilitated by investment banks.
• Evaluating the role of investment banks in facilitating mergers and acquisitions in emerging markets
• Analysing the transformation brought about by digital technologies in the delivery of investment banking services and its effects on efficiency and client satisfaction.
• Evaluating the role of investment banks in promoting sustainable finance and the integration of Environmental, Social, and Governance (ESG) criteria in investment decisions.
• Assessing the impact of technology on the efficiency and effectiveness of investment banking services
• Examining the effectiveness of investment banks in pricing and marketing IPOs, and the subsequent performance of these IPOs in the stock market.
• A comparative analysis of different risk management strategies employed by investment banks
• Examining the relationship between investment banking fees and corporate performance
• A comparative analysis of competitive strategies employed by leading investment banks and their impact on market share and profitability

Private Equity & Venture Capital (VC)

These research topic ideas are centred on venture capital and private equity investments, with a focus on their impact on technological startups, emerging technologies, and broader economic ecosystems.

• Investigating the determinants of successful venture capital investments in tech startups
• Analysing the trends and outcomes of venture capital funding in emerging technologies such as artificial intelligence, blockchain, or clean energy
• Assessing the performance and return on investment of different exit strategies employed by venture capital firms
• Assessing the impact of private equity investments on the financial performance of SMEs
• Analysing the role of venture capital in fostering innovation and entrepreneurship
• Evaluating the exit strategies of private equity firms: A comparative analysis
• Exploring the ethical considerations in private equity and venture capital financing
• Investigating how private equity ownership influences operational efficiency and overall business performance
• Evaluating the effectiveness of corporate governance structures in companies backed by private equity investments
• Examining how the regulatory environment in different regions affects the operations, investments and performance of private equity and venture capital firms

Asset Management

This list includes a range of research topic ideas focused on asset management, probing into the effectiveness of various strategies, the integration of technology, and the alignment with ethical principles among other key dimensions.

• Analysing the effectiveness of different asset allocation strategies in diverse economic environments
• Analysing the methodologies and effectiveness of performance attribution in asset management firms
• Assessing the impact of environmental, social, and governance (ESG) criteria on fund performance
• Examining the role of robo-advisors in modern asset management
• Evaluating how advancements in technology are reshaping portfolio management strategies within asset management firms
• Evaluating the performance persistence of mutual funds and hedge funds
• Investigating the long-term performance of portfolios managed with ethical or socially responsible investing principles
• Investigating the behavioural biases in individual and institutional investment decisions
• Examining the asset allocation strategies employed by pension funds and their impact on long-term fund performance
• Assessing the operational efficiency of asset management firms and its correlation with fund performance

Hedge Funds

Here we explore research topics related to hedge fund operations and strategies, including their implications on corporate governance, financial market stability, and regulatory compliance among other critical facets.

• Assessing the impact of hedge fund activism on corporate governance and financial performance
• Analysing the effectiveness and implications of market-neutral strategies employed by hedge funds
• Investigating how different fee structures impact the performance and investor attraction to hedge funds
• Evaluating the contribution of hedge funds to financial market liquidity and the implications for market stability
• Analysing the risk-return profile of hedge fund strategies during financial crises
• Evaluating the influence of regulatory changes on hedge fund operations and performance
• Examining the level of transparency and disclosure practices in the hedge fund industry and its impact on investor trust and regulatory compliance
• Assessing the contribution of hedge funds to systemic risk in financial markets, and the effectiveness of regulatory measures in mitigating such risks
• Examining the role of hedge funds in financial market stability
• Investigating the determinants of hedge fund success: A comparative analysis

Financial Planning and Advisory

This list explores various research topic ideas related to financial planning, focusing on the effects of financial literacy, the adoption of digital tools, taxation policies, and the role of financial advisors.

• Evaluating the impact of financial literacy on individual financial planning effectiveness
• Analysing how different taxation policies influence financial planning strategies among individuals and businesses
• Evaluating the effectiveness and user adoption of digital tools in modern financial planning practices
• Investigating the adequacy of long-term financial planning strategies in ensuring retirement security
• Assessing the role of financial education in shaping financial planning behaviour among different demographic groups
• Examining the impact of psychological biases on financial planning and decision-making, and strategies to mitigate these biases
• Assessing the behavioural factors influencing financial planning decisions
• Examining the role of financial advisors in managing retirement savings
• A comparative analysis of traditional versus robo-advisory in financial planning
• Investigating the ethics of financial advisory practices

The following list delves into research topics within the insurance sector, touching on the technological transformations, regulatory shifts, and evolving consumer behaviours among other pivotal aspects.

• Analysing the impact of technology adoption on insurance pricing and risk management
• Analysing the influence of Insurtech innovations on the competitive dynamics and consumer choices in insurance markets
• Investigating the factors affecting consumer behaviour in insurance product selection and the role of digital channels in influencing decisions
• Assessing the effect of regulatory changes on insurance product offerings
• Examining the determinants of insurance penetration in emerging markets
• Evaluating the operational efficiency of claims management processes in insurance companies and its impact on customer satisfaction
• Examining the evolution and effectiveness of risk assessment models used in insurance underwriting and their impact on pricing and coverage
• Evaluating the role of insurance in financial stability and economic development
• Investigating the impact of climate change on insurance models and products
• Exploring the challenges and opportunities in underwriting cyber insurance in the face of evolving cyber threats and regulations

Quantitative Finance

These topic ideas span the development of asset pricing models, evaluation of machine learning algorithms, and the exploration of ethical implications among other pivotal areas.

• Developing and testing new quantitative models for asset pricing
• Analysing the effectiveness and limitations of machine learning algorithms in predicting financial market movements
• Assessing the effectiveness of various risk management techniques in quantitative finance
• Evaluating the advancements in portfolio optimisation techniques and their impact on risk-adjusted returns
• Evaluating the impact of high-frequency trading on market efficiency and stability
• Investigating the influence of algorithmic trading strategies on market efficiency and liquidity
• Examining the risk parity approach in asset allocation and its effectiveness in different market conditions
• Examining the application of machine learning and artificial intelligence in quantitative financial analysis
• Investigating the ethical implications of quantitative financial innovations
• Assessing the profitability and market impact of statistical arbitrage strategies considering different market microstructures

Treasury Management

The following topic ideas explore treasury management, focusing on modernisation through technological advancements, the impact on firm liquidity, and the intertwined relationship with corporate governance among other crucial areas.

• Analysing the impact of treasury management practices on firm liquidity and profitability
• Analysing the role of automation in enhancing operational efficiency and strategic decision-making in treasury management
• Evaluating the effectiveness of various cash management strategies in multinational corporations
• Investigating the potential of blockchain technology in streamlining treasury operations and enhancing transparency
• Examining the role of treasury management in mitigating financial risks
• Evaluating the accuracy and effectiveness of various cash flow forecasting techniques employed in treasury management
• Assessing the impact of technological advancements on treasury management operations
• Examining the effectiveness of different foreign exchange risk management strategies employed by treasury managers in multinational corporations
• Assessing the impact of regulatory compliance requirements on the operational and strategic aspects of treasury management
• Investigating the relationship between treasury management and corporate governance

Financial Technology (FinTech)

The following research topic ideas explore the transformative potential of blockchain, the rise of open banking, and the burgeoning landscape of peer-to-peer lending among other focal areas.

• Evaluating the impact of blockchain technology on financial services
• Investigating the implications of open banking on consumer data privacy and financial services competition
• Assessing the role of FinTech in financial inclusion in emerging markets
• Analysing the role of peer-to-peer lending platforms in promoting financial inclusion and their impact on traditional banking systems
• Examining the cybersecurity challenges faced by FinTech firms and the regulatory measures to ensure data protection and financial stability
• Examining the regulatory challenges and opportunities in the FinTech ecosystem
• Assessing the impact of artificial intelligence on the delivery of financial services, customer experience, and operational efficiency within FinTech firms
• Analysing the adoption and impact of cryptocurrencies on traditional financial systems
• Investigating the determinants of success for FinTech startups

Commercial Banking

These topic ideas span commercial banking, encompassing digital transformation, support for small and medium-sized enterprises (SMEs), and the evolving regulatory and competitive landscape among other key themes.

• Assessing the impact of digital transformation on commercial banking services and competitiveness
• Analysing the impact of digital transformation on customer experience and operational efficiency in commercial banking
• Evaluating the role of commercial banks in supporting small and medium-sized enterprises (SMEs)
• Investigating the effectiveness of credit risk management practices and their impact on bank profitability and financial stability
• Examining the relationship between commercial banking practices and financial stability
• Evaluating the implications of open banking frameworks on the competitive landscape and service innovation in commercial banking
• Assessing how regulatory changes affect lending practices and risk appetite of commercial banks
• Examining how commercial banks are adapting their strategies in response to competition from FinTech firms and changing consumer preferences
• Analysing the impact of regulatory compliance on commercial banking operations
• Investigating the determinants of customer satisfaction and loyalty in commercial banking

International Finance

The folowing research topic ideas are centred around international finance and global economic dynamics, delving into aspects like exchange rate fluctuations, international financial regulations, and the role of international financial institutions among other pivotal areas.

• Analysing the determinants of exchange rate fluctuations and their impact on international trade
• Analysing the influence of global trade agreements on international financial flows and foreign direct investments
• Evaluating the effectiveness of international portfolio diversification strategies in mitigating risks and enhancing returns
• Evaluating the role of international financial institutions in global financial stability
• Investigating the role and implications of offshore financial centres on international financial stability and regulatory harmonisation
• Examining the impact of global financial crises on emerging market economies
• Examining the challenges and regulatory frameworks associated with cross-border banking operations
• Assessing the effectiveness of international financial regulations
• Investigating the challenges and opportunities of cross-border mergers and acquisitions

Choosing A Research Topic

These finance-related research topic ideas are starting points to guide your thinking. They are intentionally very broad and open-ended. By engaging with the currently literature in your field of interest, you’ll be able to narrow down your focus to a specific research gap .

When choosing a topic , you’ll need to take into account its originality, relevance, feasibility, and the resources you have at your disposal. Make sure to align your interest and expertise in the subject with your university program’s specific requirements. Always consult your academic advisor to ensure that your chosen topic not only meets the academic criteria but also provides a valuable contribution to the field. 

If you need a helping hand, feel free to check out our private coaching service here.

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• Economy & Politics ›

The Global Financial Crisis - Statistics & Facts

Wall Street and the ‘Great Moderation’

U.s. housing bubble, escalating crisis and the collapse of lehman brothers, policy responses and legacies of the crisis, key insights.

Detailed statistics

Great Recession: delinquency rate by loan type in the U.S. 2007-2010

Residential mortgage backed security issuance in the U.S. 2003-2023

Largest bankruptcies in the U.S. as of February 2024, by assets

Editor’s Picks Current statistics on this topic

Current statistics on this topic.

Financial Institutions

Global Financial Crisis: Lehman Brothers stock price and percentage gain 1995-2008

Mortgages & Financing

Key Economic Indicators

Related topics

Recommended.

• The Great Recession in the U.S.
• The Great Recession Worldwide
• Financial markets
• Financial markets in the U.S.
• Banks and the euro crisis
• European banks: Basel III
• Largest banks in the United States

Recommended statistics

Real estate and financial bubbles.

• Premium Statistic Value of CMBS originations in the U.S. 2000-2022
• Premium Statistic Residential mortgage backed security issuance in the U.S. 2003-2023
• Basic Statistic Total debt securities of U.S. agency- and GSE-backed mortgage pools sector 2000-2018
• Basic Statistic Great Recession: real house price index in Europe's weakest economies 2005-2011

Value of CMBS originations in the U.S. 2000-2022

Value of commercial mortgage-backed securities (CMBS) originations in the United States from 2000 to 2022 (in billion U.S. dollars)

Residential mortgage backed security issuance in the United States from 2003 to 1st half 2023 (in billion U.S. dollars)

Total debt securities of U.S. agency- and GSE-backed mortgage pools sector 2000-2018

Total debt securities of the agency- and government sponsored enterprise backed mortgage pools sector in the United States from 2000 to 2018 (in billion U.S. dollars)

Great Recession: real house price index in Europe's weakest economies 2005-2011

Real house price index in Portugal, Italy, Ireland, Greece, and Spain before and during the Great Recession from 2005 to 2011 (where 2015=100)

Wall Street crisis and global shockwaves

• Basic Statistic Great Recession: delinquency rate by loan type in the U.S. 2007-2010
• Premium Statistic Financial crisis - credit losses and writedowns of insurances 2008
• Basic Statistic Global Financial Crisis: Lehman Brothers stock price and percentage gain 1995-2008
• Basic Statistic Global Financial Crisis: Fannie Mae stock price and percentage change 2000-2010
• Basic Statistic Global Financial Crisis: Freddie Mac monthly closing stock price 2000-2010

Quarterly delinquency rate on all commercial bank loans, single-family residential mortgages and business loans in the United States from 2007 to 2010

Financial crisis - credit losses and writedowns of insurances 2008

Credit losses and writedowns at insurance companies during the financial crisis since January 2007 (in billion U.S. dollars)

Annual year end stock price and percentage gain or loss in stock price for Lehman Brothers from 1995 to 2008 (in U.S. dollars)

Global Financial Crisis: Fannie Mae stock price and percentage change 2000-2010

Annual year end stock price and percentage gain or loss in stock price for the Federal National Mortgage Association (Fannie Mae) from 2000 to 2010 (in U.S. dollars and percent)

Global Financial Crisis: Freddie Mac monthly closing stock price 2000-2010

Monthly closing stock price of the Federal Home Loan Mortgage Corporation (Freddie Mac) from January 2000 to December 2010 (in U.S. dollars)

The global recession

• Basic Statistic Great Recession: global gross domestic product (GDP) growth from 2007 to 2011
• Basic Statistic Great Recession: annual value of global exports of merchandise from 2007 to 2011
• Basic Statistic Global unemployment rate 2003-2022
• Basic Statistic Great Recession: GDP growth rates for G7 countries from 2007 to 2011
• Basic Statistic Great Recession: unemployment rate in the G7 countries 2007-2011
• Basic Statistic Great Recession: monthly industrial production in the U.S. from 2007 to 2010
• Basic Statistic Great Recession: consumer confidence level in the U.S. 2007-2010
• Basic Statistic Great Recession: GDP growth for the E7 emerging economies 2007-2011
• Basic Statistic Great Recession: GDP growth in less affected regions 2007-2011

Great Recession: global gross domestic product (GDP) growth from 2007 to 2011

Annual global gross domestic product (GDP) growth rate during the Great Recession from 2007 to 2011

Great Recession: annual value of global exports of merchandise from 2007 to 2011

Total value of annual global merchandise exports during the Great Recession from 2007 to 2011 (in millions of U.S. dollars)

Global unemployment rate 2003-2022

Global unemployment rate from 2003 to 2022 (as a share of the total labor force)

Great Recession: GDP growth rates for G7 countries from 2007 to 2011

Annual Gross Domestic Product growth rates for the G7 countries during and after the Great Recession from 2007 to 2011

Great Recession: unemployment rate in the G7 countries 2007-2011

Annual unemployment rate for the countries of the Group of Seven (G7) during and after the Great Recession from 2007 to 2011

Great Recession: monthly industrial production in the U.S. from 2007 to 2010

Monthly industrial production during the Great Recession in the United States from 2007 to January 2010 (where 2017 = 100)

Great Recession: consumer confidence level in the U.S. 2007-2010

Monthly Consumer Confidence Index (CCI) level during the Great Recession in the United States from January 2007 to January 2010

Great Recession: GDP growth for the E7 emerging economies 2007-2011

Annual Gross Domestic Product growth rates for the E7 emerging economies during the Great Recession from 2007 to 2011

Great Recession: GDP growth in less affected regions 2007-2011

Annual GDP growth in regions that experienced less severe crises during the Great Recession from 2007 to 2011

Policy interventions

• Basic Statistic Annual Fed funds effective rate in the U.S. 1990-2023
• Basic Statistic Great Recession: total U.S. government expenditure on TARP program 2008-2012
• Basic Statistic Great Recession: distribution of U.S. government spending on TARP program 2008-2012
• Basic Statistic Great Recession: U.S. public opinion on government support of financial system 2008
• Basic Statistic Great Recession: U.S government spending on ARRA by department or agency 2009-2011
• Basic Statistic Great Recession: UK government bailout of banking system in October 2008, by bank
• Basic Statistic Great Recession: general government debt as a percentage of GDP for the G7
• Basic Statistic Great Recession: major economy government expenditure as a share of GDP 2007-2011

Annual Fed funds effective rate in the U.S. 1990-2023

Federal funds rate level in the United States from 1990 to 2023

Great Recession: total U.S. government expenditure on TARP program 2008-2012

Total funds disbursed, total returns, and losses from the United States government's Troubled Asset Relief Program (TARP) from 2008 to 2012 (in billions of U.S. dollars)

Great Recession: distribution of U.S. government spending on TARP program 2008-2012

Distribution of United States government expenditure on Troubled Asset Relief Program (TARP) by program from 2008 to 2012

Great Recession: U.S. public opinion on government support of financial system 2008

Public opinion on the Unite States government's intervention to support the financial system by political affiliation in September 2008

Great Recession: U.S government spending on ARRA by department or agency 2009-2011

Total spending by the United States government on the American Recovery and Reinvestment Act (ARRA) by department or agency from 2009 to 2011 (in billions of U.S. dollars)

Great Recession: UK government bailout of banking system in October 2008, by bank

Total value of largest U.K. banks bailed out in October 2008 and the value of bailout from UK government or private investors (in billions of British pounds)

Great Recession: general government debt as a percentage of GDP for the G7

Annual general government debt as a percentage of gross domestic product (GDP) for each of the G7 countries during the Great Recession from 2007 to 2011

Great Recession: major economy government expenditure as a share of GDP 2007-2011

Annual general government expenditure as a percentage of gross domestic product (GDP) for selected major economies during the Great Recession from 2007 to 2011

Legacies of the crises

• Basic Statistic Long-term unemployment as a share of total unemployment in the U.S. 2002-2022
• Basic Statistic Share of young adults living with their parents in the U.S. 2015
• Premium Statistic Alcohol, drug, and suicide death rates in the U.S. in 1999 to 2021
• Basic Statistic Employment rate in the European Union 2017
• Basic Statistic Youth unemployment rate in the European Union and the euro area 2021
• Basic Statistic Opinion on cause of EU economic problems, by country 2012
• Premium Statistic Public opinion on further regulation on Wall Street U.S. 2019

Long-term unemployment as a share of total unemployment in the U.S. 2002-2022

Share of long-term unemployed workers in the monthly total unemployment rate in the United States from 2002 to 2022

Share of young adults living with their parents in the U.S. 2015

Share of young adults who live with their parents in the United States from 2007 to 2015

Alcohol, drug, and suicide death rates in the U.S. in 1999 to 2021

Rate of alcohol, drug, and suicide deaths in the U.S. from 1999 to 2021 (per 100,000 population)

Employment rate in the European Union 2017

Employment rate in the European Union from 2007 to 2017

Youth unemployment rate in the European Union and the euro area 2021

Youth unemployment rate in the European Union and the euro area from 2011 to 2021

Opinion on cause of EU economic problems, by country 2012

Who is most to blame for your countries current economic problems?

Public opinion on further regulation on Wall Street U.S. 2019

Share of Americans who believe further regulation should be imposed on Wall Street due to their role in the 2008 financial crisis as of July 2019

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One in 10 people in America lack health insurance, resulting in $40 billion of care that goes unpaid each year. Amitabh Chandra and colleagues say ensuring basic coverage for all residents, as other wealthy nations do, could address the most acute needs and unlock efficiency.

• 23 Mar 2023

As Climate Fears Mount, More Investors Turn to 'ESG' Funds Despite Few Rules

Regulations and ratings remain murky, but that's not deterring climate-conscious investors from paying more for funds with an ESG label. Research by Mark Egan and Malcolm Baker sizes up the premium these funds command. Is it time for more standards in impact investing?

• 14 Mar 2023

What Does the Failure of Silicon Valley Bank Say About the State of Finance?

Silicon Valley Bank wasn't ready for the Fed's interest rate hikes, but that's only part of the story. Victoria Ivashina and Erik Stafford probe the complex factors that led to the second-biggest bank failure ever.

• 13 Mar 2023

What Would It Take to Unlock Microfinance's Full Potential?

Microfinance has been seen as a vehicle for economic mobility in developing countries, but the results have been mixed. Research by Natalia Rigol and Ben Roth probes how different lending approaches might serve entrepreneurs better.

• 16 Feb 2023

ESG Activists Met the Moment at ExxonMobil, But Did They Succeed?

Engine No. 1, a small hedge fund on a mission to confront climate change, managed to do the impossible: Get dissident members on ExxonMobil's board. But lasting social impact has proved more elusive. Case studies by Mark Kramer, Shawn Cole, and Vikram Gandhi look at the complexities of shareholder activism.

• 07 Feb 2023

Supervisor of Sandwiches? More Companies Inflate Titles to Avoid Extra Pay

What does an assistant manager of bingo actually manage? Increasingly, companies are falsely classifying hourly workers as managers to avoid paying an estimated $4 billion a year in overtime, says research by Lauren Cohen.

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Publications on Financial fragility

Can it be prevented this time, the role of profits in banking regulation, the covid-19 crisis, a minskyan approach to mapping and managing the (western) financial turmoil, ages of financial instability, preventing the last crisis, minsky’s forgotten lessons ten years after lehman, the economics of instability, an abstract of an excerpt, why the united states will beat china to the next minsky moment, does the united states face another minsky moment, minsky’s financial fragility, an empirical analysis of electricity distribution companies in brazil (2007–15), integration, spurious convergence, and financial fragility, a post-keynesian interpretation of the spanish crisis.

The Spanish crisis is generally portrayed as resulting from excessive spending by households, associated with a housing bubble and/or excessive welfare spending beyond the economic possibilities of the country. We put forward a different hypothesis. We argue that the Spanish crisis resulted, in the main, from a widening deficit position in the nonfinancial corporate sector—the most important explanatory factor behind the country’s rising external imbalance—and a declining trend in profitability under a regime of financial liberalization and loose and unregulated lending practices. This paper argues that the central cause of the crisis is related to the nonfinancial corporate sector’s increasingly fragile financial position, which originated from the financial convergence that followed adoption of the euro.

Europe at the Crossroads

Financial fragility and the survival of the single currency, policy options for china, reorienting fiscal policy to reduce financial fragility, the missing macro link.

This paper addresses the critique of the aggregational problem attached to the financial instability hypothesis of Hyman Minsky. The core of this critique is based on the Kaleckian analytical framework and, in very broad terms, states that the expenditure of firms for investment is at the same time a source of income for the firms producing capital goods. Hence, even if investments are debt financed, as in Minsky’s analysis, the overall level of indebtedness of the firm sector remains unchanged, since the debts of investing firms are balanced by the income of capital goods–producing firms. According to the critics, Minsky incurs a fallacy of composition when he does not take this dynamic into account when applying his micro analysis of investment at the macro level. The aim of this paper is to clarify the consequences of debt-financed investments over the financial structure of an aggregate economy. Starting from the works of Michał Kalecki and Josef Steindl, we developed a stock-flow consistent analysis of a highly simplified economy under four different financial regimes: (1) debt-financed with no distributed profits, (2) debt-financed with distributed profits, (3) internally financed with no distributed profits, and (4) internally financed with distributed profits. The results of our investigation show that debt-financed investments do not lead to a worsening of the financial position of the firm sector only if specific assumptions are taken into account.

Fiscal Traps and Macro Policy after the Eurozone Crisis

Building effective regulation requires a theory of financial instability.

Hyman Minsky had particular views about how the regulatory system and financial architecture should be reformulated, and one of the many lessons we can learn from his work is that there is an intimate connection between how we think about the prospect of financial market instability and how we approach financial regulation. Regulation cannot be effective if it is simply based on “piecemeal” measures produced in response to the current “moment,” Minsky wrote. It needs to reformulate the structure of the financial system itself.

Measuring Macroprudential Risk through Financial Fragility

A minskyan approach.

This paper presents a method to capture the growth of financial fragility within a country and across countries. This is done by focusing on housing finance in the United States, the United Kingdom, and France. Following the theoretical framework developed by Hyman P. Minsky, the paper focuses on the risk of amplification of shock via a debt deflation instead of the risk of a shock per se. Thus, instead of focusing on credit risk, for example, financial fragility is defined in relation to the means used to service debts, given credit risk and all other sources of shocks. The greater the expected reliance on capital gains and debt refinancing to meet debt commitments, the greater the financial fragility, and so the higher the risk of debt deflation induced by a shock if no government intervention occurs. In the context of housing finance, this implies that the growth of subprime lending was not by itself a source of financial fragility; instead, it was the change in the underwriting methods in all sectors of the mortgage markets that created a financial situation favorable to the emergence of a debt deflation. Stated alternatively, when nonprime and prime mortgage lending moved to asset-based lending instead of income-based lending, the financial fragility of the economy grew rapidly.

Beyond the Minsky Moment: Where We’ve Been, Why We Can’t Go Back, and the Road Ahead for Financial Reform

Using minsky to simplify financial regulation, orthodox versus heterodox (minskyan) perspectives of financial crises, explosion in the 1990s versus implosion in the 2000s.

Orthodox and heterodox theories of financial crises are hereby compared from a theoretical viewpoint, with emphasis on their genesis. The former view (represented by the fourth-generation models of Paul Krugman) reflects the neoclassical vision whereby turbulence is an exception; the latter insight (represented by the theories of Hyman P. Minsky) validates and extends John Maynard Keynes’s vision, since it is related to a modern financial world. The result of this theoretical exercise is that Minsky’s vision represents a superior explanation of financial crises and current events in financial systems because it considers the causes of financial crises as endogenous to the system. Crucial facts in relevant financial crises are mentioned in section 1, as an introduction; the orthodox models of financial crises are described in section 2; the heterodox models of financial crises are outlined in section 3; the main similarities and differences between orthodox and heterodox models of financial crises are identified in section 4; and conclusions based on the information provided by the previous section are outlined in section 5. References are listed at the end of the paper.

Institutional Prerequisites of Financial Fragility within Minsky’s Financial Instability Hypothesis

A proposal in terms of “institutional fragility”.

The relevancy of Minsky’s Financial Instability Hypothesis (FIH) in the current (and still unfolding) crisis has been clearly acknowledged by both economists and regulators. While most papers focus on discussing to what extent the FIH or Minsky’s Big Bank/Big Government interpretation is appropriate to explain and sort out the crisis, some authors have also emphasized the need to consider the institutional foundations of Minsky’s work (Whalen 2007, Wray 2008, Dimsky 2010). The importance of institutions within the FIH was strongly emphasized by Minsky himself, who assigned them the function of constraining the development of financial fragility. Yet only limited literature has focused on the institutional aspects on Minsky’s FIH. The reason for this may be that they were mainly dealt with by Minsky in his latest papers, and they have remained, to some extent, incomplete, unclear, and even ambiguous. In our view, a synthesis of Minsky’s proposals, along with a clarification and theoretical justification, remains to be done. Our objective in this paper is to contribute to this theoretical project. It leads us to propose that the notion of “institutional fragility” can constitute a useful perspective to complement and justify the endogenous development of financial fragility within the FIH. Eventually, this view may contribute to the debate about international financial governance.

Minsky on the Reregulation and Restructuring of the Financial System

Will dodd-frank prevent "it" from happening again `, measuring macroprudential risk, financial fragility indexes.

With the Great Recession and the regulatory reform that followed, the search for reliable means to capture systemic risk and to detect macrofinancial problems has become a central concern. In the United States, this concern has been institutionalized through the Financial Stability Oversight Council, which has been put in charge of detecting threats to the financial stability of the nation. Based on Hyman Minsky’s financial instability hypothesis, the paper develops macroeconomic indexes for three major economic sectors. The index provides a means to detect the speed with which financial fragility accrues, and its duration; and serves as a complement to the microprudential policies of regulators and supervisors. The paper notably shows, notably, that periods of economic stability during which default rates are low, profitability is high, and net worth is accumulating are fertile grounds for the growth of financial fragility.

The Meltdown of the Global Economy

A keynes-minsky episode.

The enormity and pervasiveness of the global economic crisis that began in 2008 makes it relevant to analyze the circumstances that can explain this catastrophe. This will also provide clues to the appropriate remedial measures needed to prevent future occurrences of similar developments.

The paper begins with some theoretical concerns relating to factors that could trigger a similar crisis. The first of these concerns relates to the deregulated financial institutions and the growing uncertainty that can be witnessed in these liberalized financial markets. The secondrelates to financial engineering with innovations in these markets, simultaneously providing cushions against risks while generating flows of liquidity that remain beyond the conventional sources of bank credit.

Interpreting the role of uncertainty, one can observe the connections between investment and finance, both of which are subject to changes in the state of expectations. The initial formulation can be traced back to John Maynard Keynes’s General Theory (1936), where liquidity preference is linked to asset prices and new investments. The Keynesian analysis of the impact of uncertainty related expectations was reformulated in 1986 by Hyman P. Minsky, who introduced the possibility of sourcing external finance through debt, which further adds to the impact of uncertainty. Minsky’s characterization of deregulated financial markets considers the newfangled sources of nonbank credit, especially with the involvement of banks in the securities market under the universal banking model.

As for the institutional arrangements that provide for profits on transactions, financial assets bought and sold in the primary market as initial public offerings of stocks are usually transacted later, in the secondary market, where these are no longer backed by physical assets.In the upswing, finance creates a myriad of financial claims and liabilities, and thus becomes increasingly remote from the real economy, while innovations to hedge and insulate assets continue to proliferate in the financial market, especially in the presence of uncertainty.

The paper dwells on an account of the pattern of the financial crisis and its spread in the United States. This is appended by a stylized account of the turn of events in terms of a theoretical model that highlights the role of uncertainty in the process.

Detecting Ponzi Finance

An evolutionary approach to the measure of financial fragility, a contribution to the theory of financial fragility and crisis, minsky moments, russell chickens, and gray swans, the methodological puzzles of the financial instability analysis.

The recent revival of Hyman P. Minsky’s ideas among policymakers, economists, bankers, financial institutions, and the mass media, synchronized with the increasing gravity of the subprime financial crisis, demands a reappraisal of the meaning and scope of the “financial instability hypothesis” (FIH). We argue that we need a broader approach than that conventionally pursued, in order to understand not only financial crises but also the periods of financial calm between them and the transition from stability to instability. In this paper we aim to contribute to this challenging task by restating the strictly financial part of the FIH on the basis of a generalization of Minsky’s taxonomy of economic units. In light of this restatement, we discuss a few methodological issues that have to be clarified in order to develop the FIH in the most promising direction.

A Perspective on Minsky Moments

The core of the financial instability hypothesis in light of the subprime crisis.

This paper aims to help bridge the gap between theory and fact regarding the so-called “Minsky moments” by revisiting the “financial instability hypothesis” (FIH). We limit the analysis to the core of FIH—that is, to its strictly financial part. Our contribution builds on a reexamination of Minsky’s contributions in light of the subprime financial crisis. We start from a constructive criticism of the well-known Minskyan taxonomy o f financial units (hedge, speculative, and Ponzi) and suggest a different approach that allows a continuous measure of the unit’s financial conditions. We use this alternative approach to account for the cyclical fluctuations of financial conditions that endogenously generate instability and fragility. We may thus suggest a precise definition of the “Minsky moment” as the starting point of a Minskyan process—the phase of a financial cycle when many financial units suffer from both liquidity and solvency problems. Although the outlined approach is very simple and has to be further developed in many directions, we may draw from it a few policy insights on ways of stabilizing the financial cycle.

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• Twelfth Conference of the ECB-CFS Research Network on

"Learning from the Crisis: Financial Stability, Macroeconomic Policy and International Institutions"

Einaudi Institute for Economics and Finance, Rome, 12-13 November 2009

Deadline: Monday, 7 September 2009

The European Central Bank (ECB), the Center for Financial Studies (CFS), the Bank of Italy and the Einaudi Institute for Economics and Finance (EIEF) are inviting submission of papers to the 12th conference of the ECB-CFS Research Network on "Learning from the Crisis: Financial Stability, Macroeconomic Policy and International Institutions" (see http://www.eu-financial-system.org ). The objectives of the conference are: 1) to present state-of-the-art research on the roots and evolution of the current crisis, as well as the issues that it has raised for the reform of the international monetary and financial system; 2) to provide a forum for debate among market participants, policy makers and researchers.

KEYNOTE SPEAKERS

• Reform of the international financial institutions: Mario Draghi, Banca d’Italia
• Contribution of macroeconomic policies to stability: Olivier Blanchard, International Monetary Fund
• Reform of regulation and supervision: Patrick Bolton, Columbia University

The submission of research papers in the following fields is especially encouraged:

• Role of monetary policy and financial regulation
• Role of large emerging market economies in global imbalances
• Role of financial innovation, rating agencies, mispricing of risk, managerial incentives, etc.
• Real effects of the crisis and financial feedbacks
• Relative effectiveness of various macroeconomic policies in restoring economic and financial stability
• Budgetary implications of public bailouts and support to distressed institutions and their long-term consequences
• Coordination among the major industrial and emerging countries in and after the crisis
• Design of regulatory and supervisory regimes: Is a new paradigm needed?
• International accounting standards, market transparency and pro-cyclicality of capital ratios
• Financial innovation, risk management and the role of rating agencies
• Redressing managerial incentives in financial institutions
• Re-defining the roles of the IMF, the BIS, the World Bank and related institutions
• Coordination of policy responses and international financial integration
• Supra-national bank supervision and systemic stability

Submission of papers on related topics falling within the scope of the network, as described on its website , is also welcome. Selected papers will have a discussant and will be placed on the network website.

Travel (economy class round-trip) and accommodation expenses will be covered for academic speakers.

SUBMISSION INFORMATION

Research papers should be sent electronically (MS Word or pdf versions only) to Sabine Wiedemann at the ECB by Monday, 7 September 2009. The authors of selected papers will be informed by early October.

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Go raibh maith agat!

Rinneamar nuashonrú ar ár mbeartas príobháideachais.

Bímid ag oibriú i gcónaí chun an suíomh gréasáin seo a fheabhsú dár n-úsáideoirí. Úsáidimid na sonraí anaithnide a chuireann fianáin ar fáil chun é sin a dhéanamh. Féach ar na rudaí a athraíodh inár mbeartas príobháideachais

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FX Crisis: Nigeria should explore other alternative currencies for imports — Expert

Financial expert and head of investment and research at Meristem Securities Limited, Praise Ihensekhien, has advised the federal government to adopt other currencies for import-related transactions to reduce Dollar dependence and preserve the stability of the Naira in the forex market.

Ihensekhien shared this insight during the Economy Outlook webinar hosted by Nairametrics on Saturday.

According to her, if such policy is implemented, the need for the greenback will significantly diminish, providing the Naira with some respite in the forex market.

While lauding the CBN’s efforts to stabilize the Naira through numerous policies, Ihensekhien pointed out that there is a need for more action, particularly in boosting the supply.

She noted CBN still requires substantial Dollar inflow into the foreign exchange market.

• “I think another thing that we can explore as a country is to have other arrangements with other countries to pay for whatever it is that we are importing in a different currency and not just USD. This will reduce the demand for USD.
• “My expectation is that the CBN continues to float OMO bills because these bills are very instrumental in determining the fixed income environment.
• “And we know that this will also translate into the interest rate being very attractive very Naira investment.
• “We need to see more of foreign direct investment comes into the country. They will not come in if the economy is not stable, if they’re not seeing a good macroeconomic environment that can ensure stability of return,” Ihensekhien said.

CBN to explore multilateral lending with other Central Banks

In addition, the financial expert said the CBN can also explore multilateral lending in terms of concessionary facilities that can be extended over a long period of time.

According to her, these loans will significantly result in inflow of Dollars coming into the country.

Ihensekhien said, for instance, that an inflow of around $10 billion into Nigeria, accompanied by a long-term agreement, would be extremely beneficial.

• “The CBN can definitely explore speaking to and having bilateral agreements with other Central Banks that will significant inflow of Dollars coming into the country.
• “If we have a significant inflow of like $10 billion coming into the country, that comes with an extended tenure of agreement, it will be very instrumental. So we need to see those inflows coming in.
• “We’ve seen the portfolio investment increase which is very good. Foreign portfolio investment have increased. However, we’ve not gotten to where we were in 2020,” she added.

What you should know

In its efforts to achieve price stability in the foreign exchange market, the Central Bank of Nigeria has implemented various macroeconomic measures recently to tackle the country’s foreign exchange crisis.

Under the leadership of Yemi Cardoso, the CBN has rolled out nothing less that fifty circular targeted at reforming the foreign exchange market and ensuring currency stability in the country.

• Subsequently, the market has reacted positively to these changes with the Naira gaining a whooping 21.8% in March 2024, the highest in five years.
• According to Nairametrics daily FX watch , the Naira has incessantly strengthened against the Dollar, settling around N1255/$ based of the latest market report.
• Meanwhile, there are some who believe the bullish run of the Naira may not be sustainable without increase in supply in the FX market in the long-run.

Nigeria’s FX reserve dips by $1.02 billion in 18 days on CBN’s naira defence

2024 budget: nigerian court asked to block ‘lawmakers’ from diverting trillions of naira earmarked for constituency projects, cyrus ademola.

• Cyrus Ademola is a political and economy analyst with over half a decade experience in journalism, research-based oped, economic reportage and political analysis. His works have been featured on different media outlets, covering from politics to business trends, to crime and security as well as the real estate sector.

Related Posts

Nigerian banks cannot compete with their African peers on the basis of foreign currency- Bunmi Bajomo

2024 Budget: Nigerian court asked to block 'lawmakers' from diverting trillions of naira earmarked for constituency projects

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About half of americans say public k-12 education is going in the wrong direction.

About half of U.S. adults (51%) say the country’s public K-12 education system is generally going in the wrong direction. A far smaller share (16%) say it’s going in the right direction, and about a third (32%) are not sure, according to a Pew Research Center survey conducted in November 2023.

Pew Research Center conducted this analysis to understand how Americans view the K-12 public education system. We surveyed 5,029 U.S. adults from Nov. 9 to Nov. 16, 2023.

The survey was conducted by Ipsos for Pew Research Center on the Ipsos KnowledgePanel Omnibus. The KnowledgePanel is a probability-based web panel recruited primarily through national, random sampling of residential addresses. The survey is weighted by gender, age, race, ethnicity, education, income and other categories.

Here are the questions used for this analysis , along with responses, and the survey methodology .

A majority of those who say it’s headed in the wrong direction say a major reason is that schools are not spending enough time on core academic subjects.

These findings come amid debates about what is taught in schools , as well as concerns about school budget cuts and students falling behind academically.

Related: Race and LGBTQ Issues in K-12 Schools

Republicans are more likely than Democrats to say the public K-12 education system is going in the wrong direction. About two-thirds of Republicans and Republican-leaning independents (65%) say this, compared with 40% of Democrats and Democratic leaners. In turn, 23% of Democrats and 10% of Republicans say it’s headed in the right direction.

Among Republicans, conservatives are the most likely to say public education is headed in the wrong direction: 75% say this, compared with 52% of moderate or liberal Republicans. There are no significant differences among Democrats by ideology.

Similar shares of K-12 parents and adults who don’t have a child in K-12 schools say the system is going in the wrong direction.

A separate Center survey of public K-12 teachers found that 82% think the overall state of public K-12 education has gotten worse in the past five years. And many teachers are pessimistic about the future.

Related: What’s It Like To Be A Teacher in America Today?

Why do Americans think public K-12 education is going in the wrong direction?

We asked adults who say the public education system is going in the wrong direction why that might be. About half or more say the following are major reasons:

• Schools not spending enough time on core academic subjects, like reading, math, science and social studies (69%)
• Teachers bringing their personal political and social views into the classroom (54%)
• Schools not having the funding and resources they need (52%)

About a quarter (26%) say a major reason is that parents have too much influence in decisions about what schools are teaching.

How views vary by party

Americans in each party point to different reasons why public education is headed in the wrong direction.

Republicans are more likely than Democrats to say major reasons are:

• A lack of focus on core academic subjects (79% vs. 55%)
• Teachers bringing their personal views into the classroom (76% vs. 23%)

In turn, Democrats are more likely than Republicans to point to:

• Insufficient school funding and resources (78% vs. 33%)
• Parents having too much say in what schools are teaching (46% vs. 13%)

Views also vary within each party by ideology.

Among Republicans, conservatives are particularly likely to cite a lack of focus on core academic subjects and teachers bringing their personal views into the classroom.

Among Democrats, liberals are especially likely to cite schools lacking resources and parents having too much say in the curriculum.

Note: Here are the questions used for this analysis , along with responses, and the survey methodology .

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‘Back to school’ means anytime from late July to after Labor Day, depending on where in the U.S. you live

Among many u.s. children, reading for fun has become less common, federal data shows, most european students learn english in school, for u.s. teens today, summer means more schooling and less leisure time than in the past, about one-in-six u.s. teachers work second jobs – and not just in the summer, most popular.

About Pew Research Center Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping the world. It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. Pew Research Center does not take policy positions. It is a subsidiary of The Pew Charitable Trusts .