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Lessons We Should Have Learned from the Global Financial Crisis but Didn't

L. Randall Wray

Economics Working Paper Archive from Levy Economics Institute

Abstract: In this paper, I first quickly recount the causes and consequences of the global financial crisis (GFC). Of course, the triggering event was the unfolding of the subprime crisis; however, I argue that the financial system was already so fragile that just about anything could have caused the collapse. I then move on to an assessment of the lessons we should have learned. Briefly, these include: (a) the GFC was not a liquidity crisis, (b) underwriting matters, (c) unregulated and unsupervised financial institutions naturally evolve into control frauds, and (d) the worst part is the cover-up of the crimes. I argue that we cannot resolve the crisis until we begin going after the fraud. Finally, I outline an agenda for reform, along the lines suggested by the work of Hyman P. Minsky.

Keywords: Global Financial Crisis; Subprime Crisis; Hyman P. Minsky; Galbraith and the Great Crash; Control Fraud; Underwriting; Deregulation; Financial Reform (search for similar items in EconPapers)
JEL-codes: E3 E11 E12 E32 E44 G01 G21 G38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-pke
Date: 2011-08
References: View references in EconPapers View complete reference list from CitEc
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