 THE FINANCIAL CRISIS – EXPLAINING THE COSTSLivia Maria Rotaru
Journal of Financial and Monetary Economics, 2014, vol. 1, issue 1, 187-193 Abstract: There is a significant literature related to the causes of the recent financial crisis, but the costs and measures that it involved are still under discussion. The recent turmoil has proved to be more costly in terms of GDP growth and public debt. The smaller fiscal costs were due, in part, to large economies that had the necessary flexibility to intervene. The existing regulations did not pay enough attention to the economy as a whole, but rather to each financial institution, and moreover, it did not consider the interaction between financial and price stability. An assessment of the situation should take into consideration not only the direct costs such as capital infusion or emergency liquidity, but also the indirect cost like less tax revenue, higher budget spending or increased interest rates for existing debt. Each country reacted differently to this shock, but there is a universal consensus that the regulations must be changed to prevent future problems. Keywords: financial crisis; macroprudential policies; financial costs; financial stability; price stability (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:vls:rojfme:v:1:y:2014:i:1:p:187-193 Access Statistics for this article More articles in Journal of Financial and Monetary Economics from Centre of Financial and Monetary Research "Victor Slavescu" Contact information at EDIRC. |
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