2008 Financial Crisis and Systemic Risk Regulation

Research Article
Open access

2008 Financial Crisis and Systemic Risk Regulation

Hesheng Chen 1*
  • 1 Antai College of Economics & Management, Shanghai Jiao Tong University, Shanghai 200240, China    
  • *corresponding author hschen0423@sjtu.edu.cn
Published on 10 November 2023 | https://doi.org/10.54254/2754-1169/34/20231668
AEMPS Vol.34
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-83558-089-9
ISBN (Online): 978-1-83558-090-5

Abstract

During the post-pandemic era, whether Covid-19 will cause a financial crisis is one of the key issues. Some research are done about the relationships between the Covid-19 crisis and the 2008 financial crisis, but there still exists much blank about mechanics and explanations in this field. This paper first focuses on the 2008 financial crisis, analyzing key factors attributing to such a serious financial crisis, giving suggestions in response to factors found, and then comparing the 2008 financial crisis to the Covid-19 crisis to give some warnings. In the course of analyzing key factors, this paper concludes with previous research and uses the game theory model to show why the policy of the government is indispensable. As to give responses, this paper takes the Dodd-Frank Act and Basel III for example to show how people deal with key factors found before and then gives some supplementary suggestions. The conclusion of this paper is that the 2008 financial crisis was the result of constantly aggressive monetary policy and people’s lack of awareness of risks and proper regulation. The by comparing the Covid-19 crisis and the 2008 financial crisis, this paper thinks the Covid-19 crisis won’t be serious if the Fed is careful about constantly aggressive monetary policy and the government strictly implement policies like the Dodd-Frank Act and Basel III.

Keywords:

financial crisis, systemic risk, regulatory responses

Chen,H. (2023). 2008 Financial Crisis and Systemic Risk Regulation. Advances in Economics, Management and Political Sciences,34,19-26.
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References

[1]. Murphy, A. An Analysis of the Financial Crisis of 2008: Causes and Solutions. Social Science Research Network (2008).

[2]. Young, J.: Too Big to Fail: Definition, History, and Reforms. Investopedia. https://www.investopedia.com/terms/t/too-big-to-fail.asp, last accessed 2023/4/15.

[3]. Lin, J., & Treichel, V. The Unexpected Global Financial Crisis: Researching Its Root Cause. In The World Bank eBooks (2012).

[4]. Federal Reserve Economic Data. FRED. https://fred.stlouisfed.org/, last accessed 2023/4/15.

[5]. Mankiw, N. G.: Principles of Economics. Cengage Learning (2016).

[6]. Sanders, A. B.: The subprime crisis and its role in the financial crisis. Journal of Housing Economics 17(4), 254–261 (2008).

[7]. Deng, B., & Zhang, D.: Study on Moral Hazard of Credit Default Swap under Financial Crisis. Economic Review (01), 5-14+22 (2011).

[8]. Financial crisis of 2007–08: Definition, Causes, Effects, & Facts. Encyclopedia Britannica. https://www.britannica.com/event/financial-crisis-of-2007-2008/Key-events-of-the-crisis, last accessed 2023/4/15.

[9]. Acharya, V. V., & Richardson, M.: Implications of the Dodd-Frank Act. Annual Review of Financial Economics 4(1), 1–38 (2012).

[10]. Hayes, A. Dodd-Frank Act: What It Does, Major Components, Criticisms. Investopedia. https://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp, last accessed 2023/4/15.

[11]. Bloomenthal, A. Basel III: What It Is, Capital Requirements, and Implementation. Investopedia. https://www.investopedia.com/terms/b/basell-iii.asp, last accessed 2023/4/15.

[12]. Hartlage, A. W.: The Basel III Liquidity Coverage Ratio and Financial Stability. Michigan Law Review 111(3), 453–483 (2012).

Cite this article

Chen,H. (2023). 2008 Financial Crisis and Systemic Risk Regulation. Advances in Economics, Management and Political Sciences,34,19-26.

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About volume

Volume title: Proceedings of the 7th International Conference on Economic Management and Green Development

ISBN：978-1-83558-089-9(Print) / 978-1-83558-090-5(Online)
Editor：Canh Thien Dang
Conference website: https://www.icemgd.org/
Conference date: 6 August 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.34
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Murphy, A. An Analysis of the Financial Crisis of 2008: Causes and Solutions. Social Science Research Network (2008).

[2]. Young, J.: Too Big to Fail: Definition, History, and Reforms. Investopedia. https://www.investopedia.com/terms/t/too-big-to-fail.asp, last accessed 2023/4/15.

[3]. Lin, J., & Treichel, V. The Unexpected Global Financial Crisis: Researching Its Root Cause. In The World Bank eBooks (2012).

[4]. Federal Reserve Economic Data. FRED. https://fred.stlouisfed.org/, last accessed 2023/4/15.

[5]. Mankiw, N. G.: Principles of Economics. Cengage Learning (2016).

[6]. Sanders, A. B.: The subprime crisis and its role in the financial crisis. Journal of Housing Economics 17(4), 254–261 (2008).

[7]. Deng, B., & Zhang, D.: Study on Moral Hazard of Credit Default Swap under Financial Crisis. Economic Review (01), 5-14+22 (2011).

[8]. Financial crisis of 2007–08: Definition, Causes, Effects, & Facts. Encyclopedia Britannica. https://www.britannica.com/event/financial-crisis-of-2007-2008/Key-events-of-the-crisis, last accessed 2023/4/15.

[9]. Acharya, V. V., & Richardson, M.: Implications of the Dodd-Frank Act. Annual Review of Financial Economics 4(1), 1–38 (2012).

[10]. Hayes, A. Dodd-Frank Act: What It Does, Major Components, Criticisms. Investopedia. https://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp, last accessed 2023/4/15.

[11]. Bloomenthal, A. Basel III: What It Is, Capital Requirements, and Implementation. Investopedia. https://www.investopedia.com/terms/b/basell-iii.asp, last accessed 2023/4/15.

[12]. Hartlage, A. W.: The Basel III Liquidity Coverage Ratio and Financial Stability. Michigan Law Review 111(3), 453–483 (2012).

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