A Closer Look at the Global Financial Crisis

Martin VICTOR

ISM 2013

A Closer Look at the Global Financial Crisis

Summary

Introduction

I. The treatment of the risk at the core of subprime crisis.

A. Finance and risk: the great issue.

B. The dispersion of the risk in the case of the subprime crisis

C. The mechanism of “risk return” within subprime crisis.

D. Consequence: where is the risk? Confidence crisis.

II. The consequences of subprime crisis in real economy

A. Effects of Subprime crisis in Real Estate and Credit conditions

a) The real estate

b) The extension of the “credit crunch”

B. The consequences of subprime crisis on others countries through external trade.

a) The interconnection between different economies through international trade

b) The different kinds of dependence.

C. The impact of subprime crisis on the foreign exchange markets

a) The apparent stop of the Yen Carry trade can affect an already endangered Japanese economy.

b) Commodities and depreciation of the dollar.

D. The impact on economic growth.

a) The impact on US growth.

b) The impact on world economy.

III. What kind of solutions has left the subprime crisis?

A. What kind of policy for central banks?

B. Results, failures and limits of the intervention

C. What is going to change in the financial sphere?

IV. An almost ordinary crisis.

A. A traditional euphoria for a market that creates a bubble.

a) The conditions for a boom in the United States.

b) It already happened elsewhere, the example of Thailand.

B. The usual fundamentals.

C. lack of competitiveness which provokes inflation

a) Raising indebtedness.

b) The