Читать книгу Understanding Systemic Risk in Global Financial Markets - Gottesman Aron - Страница 13

Financial crises are far from a new phenomenon, having occurred as long as money and financial markets have been in existence. On the surface, it may appear that there is little to be learned from any event that occurred hundreds of years ago. Clearly the global financial services industry that exists today bears little resemblance to the one that existed even 50 years ago, due to changes in market structures, technological advances, the sophistication of risk analytical tools, and the highly developed nature of global financial regulatory frameworks.

It is outside the scope of this book to categorize every crisis throughout history, or to draw definitive conclusions about their primary causes. However, despite the vast differences in the way financial markets operate today, a brief review of key past events will reveal some common themes with respect to the nature and causes of such events. An understanding of these themes can assist the many actors involved in the study of systemic risk (e.g., risk managers, academics, policymakers, or regulators) to obtain a broader perspective on certain risks that have manifested themselves repeatedly throughout history and potentially identify the buildup of these risks before they become a full-fledged crisis. Consider the following remarks by well-known academics Carmen Reinhart and Kenneth Rogoff;

Until very recently, studies of banking crisis have focused either on episodes drawn from the history of advanced countries (mainly the banking panics before World War II) or on the experience of modern day emerging markets. This dichotomy has perhaps been shaped by the belief that for advanced economies, destabilizing, multi-country financial crises are a relic of the past. Of course, the Second Great Contraction, the global financial crisis that recently engulfed the United States and Europe, has dashed this misconception, albeit at a great social cost. 14

After reading this chapter you will be able to:

● Cite examples of some of the most noteworthy financial crises in history.

● Explain some of the common themes behind prior systemic events.

● Understand what is meant by an “asset bubble” and describe the economic conditions that typically lead to a bubble.

● Describe which countries have been the source of most sovereign defaults in history.

● Understand the ways in which international contagion either fueled or contributed to the severity of prior financial crises, including the Great Depression.