The past year was a momentous one for India. The country navigated through the shoals of an unprecedented global financial crisis with only modest negative impact, and successfully continued the world’s largest exercise in democracy. The 15th general election in April-May 2009 saw the venerable Congress Party return to power with a large mandate. On the external front, although ties between Ind...

From the early outward signs of a collapse in the US sub-prime mortgage market in the spring of 2007, the global banking crisis unfolded. Financial institutions thought too big to fail, failed. In the summer of 2007 the French bank BNP Paribas ceased activity in three hedge funds that specialized in USmortgage debt.Meanwhile, in Britain, on 14th September investors in the bank, Northern Rock, w...

Bank executives’ compensation has been widely identified as a culprit in the Global Financial Crisis, and reform of banker pay is high on the public policy agenda. While Congress targeted its reforms primarily at bankers’ equity-based pay incentives, empirical research fails to show any correlation between bank CEO equity incentives and bank performance in the Financial Crisis. We offer an alte...

any of the myriad problems in the u.s. mortgage market could have been contained, but together they caused a crisis that spread across the globe T HE causes of the crisis in subprime mortgages have become clear. They started with poor underwriting practices, which became legion. But damage was propagated at each stage of the complicated process in which a risky home loan was originated, then be...

The radical deregulation of financial markets after the 1970s was a precondition for the explosion in size, complexity, volatility and degree of global integration of financial markets in the past three decades. It therefore contributed to the severity and breadth of the recent global financial crisis. It is not likely that deregulation would have been so extreme and the crisis so threatening h...

Often, systemic banking crises initiate from one or more banks and affect countries by rapid spreading in the banking network, financial markets and economy of countries. According to Reinhart & Rogoff (2009) in the book titled "This time is Different," financial crises are pointed as an equal opportunity menace for high-income countries and emerging markets. Although The International Mo...

The potential impact of interconnected financial institutions on interbank financial systems is a financial stability concern for central banks and regulators. A number of algorithms/methods have been developed to extrapolate latent interbank risk exposures. However, most use highly stylized network models and reconstruction methods with global optimality lending allocation approaches such as m...

All European member-states have been hit by the economic crisis, but some have been harder hit than others. The ‘liberal market economies’ (LMEs) of Anglophone countries, consisting of Britain and Ireland as well as the United States, long the darlings of the markets and the pundits, have this time been hardest hit, with their credit-fueled finance-driven model of growth having been at the hear...