A Global History of the Financial Crash of 2007–10

This book presents a detailed yet non-technical analysis of the recent financial crisis.

Johan A. Lybeck (Author)

9781107011496, Cambridge University Press

Hardback, published 13 October 2011

416 pages, 46 b/w illus. 26 tables
22.9 x 15.2 x 2.3 cm, 0.72 kg

'This is the full story of how the Western world's banks crashed in all its gory details. Drawing on his experience of dealing with the Nordic banking crash of the 1990s, Johan Lybeck is uniquely qualified to unravel the sequence of events that led from problems in the US mortgage market to the global banking collapse of 2008, and to offer his own view of the route back to prosperity. With its meticulous assembly of data from a wide range of sources, this book will be invaluable for any student of the crisis, whether academic or practitioner.' Laurence Copeland, Professor of Finance, Cardiff Business School

We have just experienced the worst financial crash the world has seen since the Great Depression of the 1930s. While real economies in general did not crash as they did in the 1930s, the financial parts of the economy certainly did, or, at least, came very close to doing so. Hundreds of banks in the United States and Europe have been closed by their supervisory authorities, forcibly merged with stronger partners, nationalized or recapitalized with the tax payers' money. Banks and insurance companies had, by mid 2010, already written off some 2000 billion dollars in credit write-downs on loans and securities. In this book, Johan Lybeck draws on his experience as both an academic economist and a professional banker to present a detailed yet non-technical analysis of the crash. He describes how the crisis began in early 2007, explains why it happened and shows how it compares to earlier financial crises.

List of figures
List of tables
Acknowledgements
Why you - yes, you! - should read this book
1. Introduction
2. Financial crises in the United States and Europe but not in Asia
Appendix 2.1. A chronological presentation of events January 2007–December 2010
3. Could today's financial crisis have been foreseen? Some theory and some facts
4. The American housing market and the subprime crisis
5. Securitization and derivatives spread the crisis around the world
Appendix 5.1. Inherent conflicts of interest in subprime securitization
Appendix 5.2. Write-downs in individual banks, investment banks and insurance companies, 2007–9
6. Liquidity risk aspects of the crisis and a comparison with 1907 and 1929
Appendix 6.1. The liquidity-risk framework proposed by the FSA and the BIS
7. Credit risk aspects of the crisis, rating and solvency
Appendix 7.1. Government support activities for banks' capital ratios 2007–9
Appendix 7.2. The proposed new capital requirements under 'Basel III'
8. Financial crises in modern history: similarities and differences
9. Worldwide changes in regulation and supervision as a result of the crisis
Appendix 9.1. List of regulatory authorities in the United States
Outstanding issues
References
Index.

Subject Areas: Budgeting & financial management [KJMV1], Economic & financial crises & disasters [KCX], Political economy [KCP], Monetary economics [KCBM]