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All Things Considered: The Interaction of the Reasons for the Financial Crisis

Yamile Abdala Rioja ()

MPRA Paper from University Library of Munich, Germany

Abstract: The present paper reviews the causes that led to the financial crisis. Unlike other interpretations, this paper does not place main significance on a single source or on a set of causes. I consider all major standpoints highlighted by research and media prior, during and after the financial market turmoil in 2007. When evidence permits, reasons are validated and their potential consequences are reviewed by means of reductio ad absurdum, specifically by proof by contradiction. This analysis proposes arguments that are in favor and against a specific source whenever applicable, so as to address each cause’s major implications and deterrents. Ultimately, this analysis reveals through graph theory the interconnections among the analyzed sources for the crisis and their forbearance as a cluster that projected the final downturn.

Keywords: financial crisis; subprime crisis; systemic risk; financial regulation; monetary policy; global imbalances; global savings glut; shadow banking system; predatory lending; too big to fail; securitization; housing bubble; interest rates; credit ratings; toxic assets; liar loans; graph theory; directed graph; finitary relations (search for similar items in EconPapers)
JEL-codes: C65 E44 E52 E58 E66 F34 F42 G01 G15 G18 G24 G28 (search for similar items in EconPapers)
Date: 2011-09-13
New Economics Papers: this item is included in nep-ban, nep-reg and nep-ure
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