the global financial crisis
The series of events that started when the famous bank Lehman Brothers declared bankruptcy, are nowadays known as the Global Financial Crisis, which has come to be the worst economic turmoil since the Great Depression. As a result of its complexity, there is no widely agreement about what leaded to it among specialists, and the ‘’Credit Crunch’’ is a burning topic in economic circles.
The collapse of the sub-prime mortgage market it’s considered to be the trigger for the Global Financial Crisis. When rates rose, people who could not afford those interests started to default, and the whole financial industry began to feel the consequences. Finally, the major banks started to hoard liquidity instead of lending money to business or potential home-buyers. All this, added to the lack of transparent information and communication between the banks in terms of asset and risk, ended up in the Credit Crunch.
Globalization is an important issue to deal with while talking of the current crisis, as it’s consider by some authors as a process arising in the present that demonstrates a clear break with the past, for what their main argument is the financial crisis. However, history could be used to prove the globalization as a process, linear or even cyclical that so far from being a nowadays phenomenon, started centuries ago:
Alan Greenspan is one of those who think that the current crisis is a result of a bubble bursting, which occurs continually through history, rather than because of globalization. Since he regards crises as something tied to human nature, from his point of view any factor could have been the catalyst. The former Federal Reserved pointed out that he had predicted the Crisis ‘’as a reaction for a long period of prosperity’’ and he thinks that, although it will take time and patience, the global economy will recover from it.
At the end of his interview with the BBC, he alleged that the economic crunch is ‘’a once in a century type of event’’, while we
The collapse of the sub-prime mortgage market it’s considered to be the trigger for the Global Financial Crisis. When rates rose, people who could not afford those interests started to default, and the whole financial industry began to feel the consequences. Finally, the major banks started to hoard liquidity instead of lending money to business or potential home-buyers. All this, added to the lack of transparent information and communication between the banks in terms of asset and risk, ended up in the Credit Crunch.
Globalization is an important issue to deal with while talking of the current crisis, as it’s consider by some authors as a process arising in the present that demonstrates a clear break with the past, for what their main argument is the financial crisis. However, history could be used to prove the globalization as a process, linear or even cyclical that so far from being a nowadays phenomenon, started centuries ago:
Alan Greenspan is one of those who think that the current crisis is a result of a bubble bursting, which occurs continually through history, rather than because of globalization. Since he regards crises as something tied to human nature, from his point of view any factor could have been the catalyst. The former Federal Reserved pointed out that he had predicted the Crisis ‘’as a reaction for a long period of prosperity’’ and he thinks that, although it will take time and patience, the global economy will recover from it.
At the end of his interview with the BBC, he alleged that the economic crunch is ‘’a once in a century type of event’’, while we