The Crash of 2008: What Happened and Why Did It Happen?

David Bowles and Cary Cooper
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David Bowles: Lancaster University
Cary Cooper: Lancaster University

Chapter 1 in The High Engagement Work Culture, 2012, pp 7-19 from Palgrave Macmillan

Abstract: Abstract We’ve survived; some would even say it’s almost like it never happened. That we did is only testimony, however, to the skill of those who presided over these events at the head of governments in the US and Europe. Chairman Bernanke’s quote above should give us pause. It was much worse than we might like to admit. Like a patient recovering from a serious, life-threatening operation, it is easy to forget afterwards how bad things were. Maybe we need some more help remembering so that we can be sure to do something this time? Mr. Bernanke can assist us again: as quoted in the FCIC Report,2 he said that during the autumn of 2008, of the 13 most important US financial institutions, “12 were at risk of failure within a period of a week or two.”That’s right, it was a total meltdown, and only J. P. Morgan Chase would have survived without massive government intervention. The “Masters of the Universe” rescued by the US government? One would think that such a humbling experience would change behavior; but did it? Certainly, regulation has been tightened and governments everywhere have vowed to not let this happen again. Now, only time will tell.

Keywords: Hedge Fund; Credit Default Swap; Short Seller; Financial Service Industry; Financial Service Firm (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-02807-5_2

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DOI: 10.1057/9781137028075_2

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