Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Global financial crisis: causes and perspectives

Global financial crisis: causes and perspectives Purpose – This study aims at examining the current global financial crisis, by emphasizing its main causes and perspectives to define the way they can be avoided in the future. The paper argues that there is a need for a new International Financial System with the function of coordinating and guiding the different national and supranational institutions. Design/methodology/approach – This article used complexity theory and viable system approach. Findings – The findings suggest they are implicit features of these kinds of markets, due to their high uncertainty and hyper‐competitiveness, rather than temporary deviation from normal equilibrium. In this way, financial markets can be thought as Complex Adaptive Systems (CAS), which may precipitate in disorder and chaos because of a seemingly mild event, which activates latent forces and leads to emerging and unpredictable consequences. The orientation of international partners is to move towards a new international financial system, where the stabilization of financial system does not pass only through the bodies created in Bretton Woods, but through the endowment of new rules and new structures. Research limitations/implications – The research faces with evolutionary issues and it is impossible to know the total value of toxic derivatives still circulating in the world. Furthermore, the banks are still using the innovative finance to generate short‐term profits and shareholders' value. Practical implications – The findings suggest some measures to limit future instability and crises, and to reduce their negative consequences. Originality/value – The paper provides a new methodology to examine the financial crises and the way to limit them. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png EuroMed Journal of Business Emerald Publishing

Global financial crisis: causes and perspectives

EuroMed Journal of Business , Volume 5 (3): 19 – Sep 21, 2010

Loading next page...
 
/lp/emerald-publishing/global-financial-crisis-causes-and-perspectives-HnDfWFrsBg
Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
1450-2194
DOI
10.1108/14502191011080818
Publisher site
See Article on Publisher Site

Abstract

Purpose – This study aims at examining the current global financial crisis, by emphasizing its main causes and perspectives to define the way they can be avoided in the future. The paper argues that there is a need for a new International Financial System with the function of coordinating and guiding the different national and supranational institutions. Design/methodology/approach – This article used complexity theory and viable system approach. Findings – The findings suggest they are implicit features of these kinds of markets, due to their high uncertainty and hyper‐competitiveness, rather than temporary deviation from normal equilibrium. In this way, financial markets can be thought as Complex Adaptive Systems (CAS), which may precipitate in disorder and chaos because of a seemingly mild event, which activates latent forces and leads to emerging and unpredictable consequences. The orientation of international partners is to move towards a new international financial system, where the stabilization of financial system does not pass only through the bodies created in Bretton Woods, but through the endowment of new rules and new structures. Research limitations/implications – The research faces with evolutionary issues and it is impossible to know the total value of toxic derivatives still circulating in the world. Furthermore, the banks are still using the innovative finance to generate short‐term profits and shareholders' value. Practical implications – The findings suggest some measures to limit future instability and crises, and to reduce their negative consequences. Originality/value – The paper provides a new methodology to examine the financial crises and the way to limit them.

Journal

EuroMed Journal of BusinessEmerald Publishing

Published: Sep 21, 2010

Keywords: Financial risk; Complexity theory; World economy; International finance

References