STAGE OF THE ONGOING GLOBAL FINANCIAL CRISIS

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STAGE OF THE ONGOING GLOBAL FINANCIAL CRISIS

목차

1. Introduction
2. Origins of the current financial crisis
3. Distinctive stages of crisis
4. Plausible theoretical foundations
5. Transmission of Risks and Repercussions of the Credit Squeeze
6. Challenges for Banks
7. Regulatory and Monetary Policy Responses – A Critical Evaluation
8. Concluding remarks – general lessons from the crisis

본문내용

Introduction
WHAT IS GLOBAL FINANCIAL?

Introduction
what is the wandering asset bubble ?
and this crisis has four distinctive stages

Introduction
1. it has lead to the housing bubble in the U.S that was increasingly inflated by indiscriminate mortgage loans to subprime and near prime[so called ALT-A mortgage borrowers.

Introduction
2. it has spread into other types of assets and affected not only mortgage companies and specialized investment banks, but also universal banks.

Introduction
3. it induced the global liquidity crisis accompanied by a massive pullout of liabilities form the most severely affected banks, i.e.Northern Rock and Bear Sterns, and triggered anxiety about possible contagion effects on global scale.

Introduction
4. the collapse of structured investment products derived from the affected assets, mainly collateralized debt obligations(cdos),shifted the global liquidity into commodity futures causing some bubble effects in this area as well

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Managing the ‘wandering bubble’
The Fed and central banks
Need to be well-advised to direct tactical efforts toward managing the wandering bubble
Then, capital inflows to specific securities will not endanger price stability and will not hinder economic growth.
A prudent mix of regulations and monetary policy strategies:
Channel this capital into productive investments without inflationary consequences and harmful effects on real economy

Forward-looking approach to inflation targeting
A successful implementation of inflation targeting:
Allows for smoothing nominal indexation
It is likely to reduce volatility or risks associated with key policy variables
The appropriate choice of the inflation target
It is prudent for all central banks to specify the target in terms of headline, rather than core inflation.

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