Preventing the next financial crisis /
Victor A. Beker.
- 1 online resource.
- Routledge frontiers of political economy .
Includes bibliographical references and index.
Key elements in the 2007/2009 financial meltdown -- What has been done during and after the crisis -- The shadow banking system and the post-2007-2009 regulatory reform -- Systemic risk and run vulnerability -- How to prevent a new financial crisis -- Micro and macro-prudential regulation -- The reform of the international monetary regime -- Financial crises and economic theory.
"The collapse of Lehman Brothers, the oldest and fourth-largest US investment bank, in September 2008 precipitated the global financial crisis. This deepened the contraction in economic activity that had already started in December 2007 and has become known as the Great Recession. Following a sluggish and uneven period of recovery, levels of private debt have recently been on the rise again making another financial crisis almost inevitable. This book answers the key question: can anything be done to prevent a new financial crisis or minimize its impact? The book opens with an analysis of the main elements responsible for the 2007/2009 financial crisis and assesses the extent to which they are still present in todays financial system. The responses to the financial crises - particularly the Dodd-Frank Act, the establishment of the Financial Stability Board, and attempts to regulate shadow banking - are evaluated for their effectiveness. It is found that there is a high risk of a new bubble developing, there remains a lack of transparency in the financial industry, and risk-taking continues to be incentivised among bankers and investors. Proposals are put forward to ameliorate the risks, arguing for the need for an international lender of last resort, recalling Keynes' idea for an International Clearing Union"--