Explores the Origin of the Recent Banking Crisis and how to Preclude Future Crises
Shedding new light on the recent worldwide banking debacle, The Banking Crisis Handbook presents possible remedies as to what should have been done prior, during, and after the crisis. With contributions from well-known academics and professionals, the book contains exclusive, new research that will undoubtedly assist bank executives, risk management departments, and other financial professionals to attain a clear picture of the banking crisis and prevent future banking collapses.
The first part of the book explains how the crisis originated. It discusses the role of subprime mortgages, shadow banks, ineffective risk management, poor financial regulations, and hedge funds in causing the collapse of financial systems. The second section examines how the crisis affected the global market as well as individual countries and regions, such as Asia and Greece. In the final part, the book explores short- and long-term solutions, including government intervention, financial regulations, efficient bank default risk approaches, and methods to evaluate credit risk. It also looks at when government intervention in financial markets can be ethically justified.
Table of Contents
Banking Gross Negligence and Shadow Banking System
The Banking Crisis of the New Millennium—Why It Was Inevitable, Carolyn V. Currie
The Effect of Monetary Policy on Stock Prices: The Subprime Mortgage Crisis, Xanthi Gkougkousi and Peter Roosenboom
Shadow Banks and the Financial Crisis of 2007–2008, Jason Hsu and Max Moroz
Ineffective Risk Management in Banking: Bold Ignorance or Gross Negligence?, Wilhelm K. Kross and Werner Gleissner
The U.S. Mortgage Crisis: Subprime or Systemic?, Eric Tymoigne
Regulation and Financial Stability in Laissez-Faire Hong Kong: A Reassuring Record, Leo F. Goodstadt
Auction Rate Securities: Another Victim of the Credit Crisis, Edwin Neave and Samir Saadi
The Banking Crisis and the Nation-State, Jorg R. Werner
The Banking Crisis and the Insurance Markets, Christopher Parsons and Stanley Mutenga
The Role of Hedge Funds in the Banking Crisis: Victim or Culprit?, Nicolas Papageorgiou and Florent Salmon
Solving the Banking Crisis: A Private Capital Solution, François-Serge Lhabitant
Hedge Fund, Financial Leverage, and the 2008 Systematic Crisis: Are They Victims or Killers?, Ruggero Bertelli
Evaluation of Evidence for Banking Equity: Market Volatility in the Emerging Economy of China, Jack Penm and R.D. Terrell
Global, European, and Emerging Markets’ Perspectives
A Global Perspective on the Banking Crisis and Recovery: An Analysis of Domestic vs. Foreign Banks, Mahmud Hossain, Pankaj K. Jain, and Sandra Mortal
Overcoming Institutional Myopia and Bankers’ Self-Dealing Behavior: Coping with the Impact of the Global Financial Crisis on European Securitization Markets, Ulrich Hommel and Julia Reichert
The Millenium’s Credit Crunch and Lender of Last Resort: A Review of the Literature, Vicente Jakas
Emerging Stock Markets and the Current Financial Crisis: Emergence of a New Puzzle?, Mohamed El Hedi Arouri, Fredj Jawadi, and Duc Khuong Nguyen
The Financial Crisis and Loan Impairment Provisioning in Asia Banks, Tyrone M. Carlin, Nigel Finch, and Guy W. Ford
Currency and Maturity Mismatches in Latin America, Marco Sorge and Chendi Zhang
Dangers and Opportunities for the Russian Banking Sector: 2007–2008, Dean Fantazzini, Alexander Kudrow, and Andrew Zlotnik
The Stability of the Australian Banking Sector, Phillip A. Stork and Casper G. de Vries
Why Have Australian Banks Survived the Recent Global Financial Crisis?, John Simpson and Jennifer Westaway
Default Risk Codependence in the Global Financial System: Was the Bear Stearns Bailout Justified?, Jorge A. Chan-Lau
The Implementation of MiFID in the Financial Crisis Context: An Ethnographic Research Conducted in Greece, Emmanuel Fragniére and Elena Grammenou
Preventing Banking Crises, Bank Runs, Regulation, and Bailouts
Credit Derivatives and What Happened Next: Analysis and Recommendations, Bastian Breitenfellner and Niklas Wagner
Identifying Bank Runs Signals through Sociological Factors: An Empirical Research in the Geneva Area, Giuseppe Catenazzo and Emmanuel Fragniére
Bank Default Risk in the United States and the United Kingdom, Robert Powell and David E. Allen
Remuneration, Risk, and Financial Crisis, Guy W. Ford, Tyrone M. Carlin, and Nigel Finch
Some Overlooked Ethical Aspects of Bailing out Banks and the Philosophy of Frederic Bastiat, Robert W. McGee
Greg N. Gregoriou is Professor of Finance in the School of Business and Economics at the State University of New York, Plattsburgh.
"This book is a timely and welcome attempt to shed light on a number of aspects of the banking crisis that has precipitated the deepest global recession in recent memory. It would be a valued addition to the libraries of academics and policymakers alike."
—Professor Sumon Bhaumik, Senior Lecturer, Department of Economics and Finance, Brunel University, UK
"The current crisis has got various faces and dimensions. To be well understood, different points of view and perspectives have to be considered simultaneously. That is precisely the content of this book. It offers a broad overview by putting together very relevant contributions of experts from numerous financial institutions and research centers. Such an approach is the best way of avoiding similar mistakes in the future."
—Jean-David Fermanian, Senior Quantitative Researcher, Fixed Income Research Team, BNP Paribas, London, UK
"The banking and financial industry is currently experiencing a major and extremely severe crisis. This timely and unique handbook collects insightful contributions to understand not only the sources of the crisis but also how the landscape will change in the coming years. A must read for every finance practitioner."
—Dr. Jean-François Bacmann, Head of Overlay Strategies, Man Investments
"An invaluable book that will help readers gain a deeper understanding of the global financial crisis. Investors, regulators, and bankers would do well to study it carefully to avoid or protect against future banking crises."
—Arjan Berkelaar, Principal Investment Officer, World Bank Treasury, Washington, D.C., USA