DETERMINANTS OF GLOBAL FINANCIAL CRISES IN THE CONTEXT OF GLOBALISATION
Abstract
The article explores the determinants of global financial crises in the context of globalization. It is noted that over the past few decades, the world has witnessed several financial crises. Each of these events was accompanied by shocks to the economy of one or more markets or regions, and this required several years of coordinated economic and regulatory policies for the affected markets. Economic and financial crises can be combined with other crises: the food, environmental, and global warming crises, as well as the constraints of the energy paradigm and a consumption model based on the use and overuse of fossil fuels. It is argued that a single recipe for responding to the financial crisis is neither possible nor desirable. Domestic policies should be tailored to the specific circumstances of each country and aimed at revitalizing growth, restoring confidence, and ensuring an orderly return to financial stability. It is noted that the global financial crisis is driven by a combination of factors typical of previous financial crises, as well as some new elements. Crises reveal several shortcomings in financial regulation and architecture, particularly concerning systemically important financial institutions, systemic risk assessment, and resolving insolvent financial institutions. Financial crises are not homogeneous processes and can be segmented into specific stages that form a crisis life cycle model. The application of this model allows us to determine the phase of the crisis and its crisis factors, as well as measure its current potential and existing tensions. Thus, it can serve as a tool for developing anti-crisis strategies. It is concluded that the determinants of financial crises are closely interconnected and mutually influence each other. The global nature of the financial crisis clearly shows that financially integrated markets, while offering many benefits, can also create significant risks with large real economic consequences.
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Kolb R.W. (2011). Financial Contagion: The Viral Threat to the Wealth of Nations, John Wiley & Sons. 464 р.
