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Please use this identifier to cite or link to this item: http://bura.brunel.ac.uk/handle/2438/5132

Title: The evolution of the financial crisis of 2007–8
Authors: Barrell, R
Davis, EP
Keywords: Financial crises
Asset bubbles
Securitised assets
Financial sector regulation
Publication Date: 2008
Publisher: Brunel University
Citation: Economics and Finance Working Paper, Brunel University, 08-25
Abstract: The financial crisis that started in August 2008 reached a climax in the autumn of 2008 with a wave of bank nationalisations across North America and Europe. Although banking crises are not uncommon, this is the largest since 1929–33. This paper discusses the build-up to the crisis, looking at the role of low real interest rates in stimulating an asset price bubble. That bubble was stocked by financial innovation and increases in lending. New financial products were not stress tested and have failed in the downturn. After discussing the bubbles we look at the collapse of the complex asset structure, and then put the crisis in the context of the literature. The paper concludes with a discussion of policy implications of the crisis, and advocates a significant improvement in the regulatory structure.
URI: http://bura.brunel.ac.uk/handle/2438/5132
Appears in Collections:School of Social Sciences Research Papers
Economics and Finance

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