The Special Characteristics of Financial Assets

David Tuckett

Chapter 1 in Minding the Markets, 2011, pp 1-25 from Palgrave Macmillan

Abstract: Abstract The catastrophic economic and social events unleashed by the financial crisis of 2008 appeared to many people to make clear what theories about financial markets had come to ignore. Emotions really matter. As central bankers have known for a very long time, financial markets depend on credit and this in turn depends on trust and confidence (Bagehot 1873; Pixley 2004; King 2010). When they disappeared, as they did in October 2008, the fear that obligations would not be met became too great an obstacle for agents to wait for each other to pay and trading stopped. The system froze dramatically and economic activity halted.

Keywords: Financial Market; Asset Price; Financial Asset; Credit Default Swap; Behavioural Economic (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-30782-7_1

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DOI: 10.1057/9780230307827_1

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