The First Global Financial Crisis of the 21st Century

Carmen Reinhart and Andrew Felton

MPRA Paper from University Library of Munich, Germany

Abstract: Global financial markets are showing strains on a scale and scope not witnessed in the past three-quarters of a century. What started with elevated losses on U.S.-subprime mortgages has spread beyond the borders of the United States and the confines of the mortgage market. Many risk spreads have ballooned, liquidity in some market segments has dried up, and large complex financial institutions have admitted significant losses. Bank runs are no longer the subject exclusively of history.These events have challenged policymakers, and the responses have varied across region. The European Central Bank has injected reserves in unprecedented volumes. The Bank of England participated in the bail-out and, ultimately, the nationalization of a depository, Northern Rock. The U.S. Federal Reserve has introduced a variety of new facilities and extended its support beyond the depository sector. These events have also challenged economists to explain why the crisis developed, how it is unfolding, and what can be done. This volume compiles contributions by leading economists in VoxEU over the past year that attempt to answer these questions. We have grouped these contributions into three sections corresponding to those three critical questions.

Keywords: sub-prime; financial crises; monertary policy, real estate prices,default (search for similar items in EconPapers)
JEL-codes: E4 (search for similar items in EconPapers)
Date: 2008-07
New Economics Papers: this item is included in nep-cba, nep-mac, nep-rmg and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (63)

Published in VoxEU-Centre for Economic Policy Research (2008): pp. 1-169

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/11862/1/MPRA_paper_11862.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/45123/1/MPRA_paper_11862.pdf revised version (application/pdf)

Related works:
Book: The First Global Financial Crisis of the 21st Century Part II: June–December, 2008 (2009)
Working Paper: The first global financial crisis of the 21st century: Part II, June-December, 2008 (2009)
Working Paper: The first global financial crisis of the 21st century,Part II: Introduction (2009)
Book: The First Global Financial Crisis of the 21st Century Part I: August 2007-May 2008 (2008)
Working Paper: The first global financial crisis of the 21st century: Introduction (2008)
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