FINANCIAL CRISIS

http://www.enterprise-development.org/page/the-global-financial-crisis ! Dokumenty itp

• Co to jest kryzys ogólnie? Jakie są rodzaje
  The term financial crisis A situation in which the supply of money is outpaced by thedemand for money. This means that liquidity is quickly evaporated because available money is withdrawn frombanks, forcing banks either to sell other investments to make up for the shortfall or to collapse. (źródło: http://www.businessdictionary.com/definition/financial-crisis.html)

Rodzaje wg Asian Journal of Business and Management Sciences (źródło: http://www.ajbms.org/articlepdf/3ajbms20132122751.pdf)

1. SPECULATIVE BUBBLES AND DHE MARKET FAILURES

Valuation of assets in terms of true value has been an old concern in economics. Many

individuals that have an interest in this issue wonder if there is a rational foundation for

the current prices of : gold, land, shares, house or the value of money before an investment

decision is made. Basic theory of finance based on the underlying market assumes that

price of an asset is equal to the present value of its future cash flows. In principle, in an

economy with a certain number of traders, assets must be valued on the basis of the

fundamental values of the market.

Such conclusion can not be sustained given that traders do not have the same information

about real situation of companies, whose shares they trade. This refers to the short and

long term plans of firms. Consequently, situation of this nature allows individuals that

have insider information to speculate the stock prices. Therefore, the difference between

market price and the basic money market of an asset is called bubble (Tirole, 1985). In

other words, bubbles refers to the prices movements that are based on unexplained

fundamentals.

Speculative bubbles allude to a situation in which the price of securities or stocks rises

above its real value. Such trend continues until potential investors believe that the prices

are not linked with the market value. Until then, they usually buy shares because they

believe the share prices will continue to rise to the extent that they execute profit when you

decide to sell them out (Stiglitz, 1990). The presence of speculative bubbles increases the

opportunity of the market failure given the investors commitment to buy shares while share

prices rises consistantly. If at some point, most trades decide to sell their shares at the

same time, there will be no buyers in the market. As a result assumed market prices will

fail, and the value of stocks and shares will go down drastically.

Some of the historical cases of speculative

bubles and market failures are : Dutch Tulip Bubble (1637), Missisipi Bubble (1719-17200),

South Sea Bubble (1720), Bull Market (1924-1929), Japonese Economic Bubble (1984-

1989) and The explosion of the internet bubble (2003)

1. BROAD ECONOMIC CRISES

Many times throughout history, economic crises with wider dimensions have sent a shock

wave through different countries of the world. This has caused many large businesses, even

those with international and transatlantic activity to suffer severe blow and failures as a

result of the economic crisis with broader connotation (Rao dhe Naikwadi, 2009).

Crises with such proportions that affect individual countries or in block if they are under

the single umbrella of economic union are called recession and depression by economists.

Negative economic growth of the GDP for more than two consecutive quarters usually

within a single economy is defined as recession. If economic growth continues with such

negative rates for longer period is called depression. also experience increased unemployment rate in all of its economic sectors. On

the other hand, economic stagnation is defined by economists as the situation when the

pace of economic development slows down compared to the previous quarters although they

are still positive. Some of the world know crisis with larger dimensions are the great

depression of 1930s and the mortgage crisis (2008-2009) in the U.S..

3. BANKING CRISIS Banking crisis is a financial crisis that affects the activity of banks in how they manage

assets, liabilities and the equity in their possession. During crises, banks are exposed in

so called phenomen ''bank run'', which means that bank depositors suddenly rush to

withdraw their savings and capital (Fratianni and Marchionne, 2009). The action comes due to the the panic caused in the financial market because depositors believe that banks will soon go bankrupt, and as a result they may lose their capital accumulated over the years. Some of the examples of the runs are the case of the Bank of America in 1931 and of british bank Northern Rock in 2007.

• 2. nasz kryzys z 2007/2008r.

http://www.britannica.com/EBchecked/topic/1484264/The-Financial-Crisis-of-2008-Year-In-Review-2008:

In 2008 the world economy faced its most dangerous crisis since the Great Depression of the 1930s. The contagion, which began in 2007 when sky-high home prices in the United States finally turned decisively downward, spread quickly, first to the entire U.S. financial sector and then to financial markets overseas. The casualties in the United States included a) the entire investmentbanking industry, b) the biggest insurance company, c) the two enterprises chartered by the government to facilitate mortgage lending, d) the largest mortgage lender, e) the largest savings and loan, and f) two of the largest commercial banks.

but let's start from the beginning

• what was the reason

tutaj znalazłam najfajniej opisane i wypisalam Ci najwazniejsze fragmenty ale patrzylam na wielu stronach wiec w bibliografii dodamy jeszcze parę ;) http://www.investopedia.com/articles/economics/09/financial-crisis-review.asp:

In 2001, the U.S. economy experienced a mild, short-lived recession. Although the economy nicely withstood terrorist attacks, the bust of the dotcom bubble, and accounting scandals, the fear of recession really preoccupied everybody's minds

To keep recession away, the Federal Reserve lowered the Federal funds rate 11 times - from 6.5% in May 2000 to 1.75% in December 2001 - creating a flood of liquidity in the economy. Cheap money, once out of the bottle, always looks to be taken for a ride. It found easy prey in restless bankers - and even more restless borrowers who had no income, no job and no assets.

The Fed continued slashing interest rates, emboldened, perhaps, by continued low inflation despite lower interest rates. In June 2003, the Fed lowered interest rates to 1%, the lowest rate in 45 years. The whole financial market started resembling a candy shop <3 (zostawmy to porównanie z cukierkami, jest cudowne :)) where everything was selling at a huge discount and without any down payment. 

But the bankers thought that it just wasn't enough to lend the candies lying on their shelves. They decided to repackage candy loans into collateralized debt obligations (CDOs) and pass on the debt to another candy shop. Hurrah! Soon a big secondary market for originating and distributing subprime loans developed. To make things merrier, in October 2004, the Securities Exchange Commission (SEC) relaxed the net capital requirement for five  investment banks. which freed them to leverage up to 30-times or even 40-times their initial investment. Everybody was on a sugar high, feeling as if the cavities were never going to come.

The trouble started when the interest rates started rising and home ownership reached a saturation point. From June 30, 2004, onward, the Fed started raising rates. by 2004, U.S. homeownership had peaked at 70%; no one was interested in buying or eating more candy. new homes being affected, but many subprime borrowers now could not withstand the higher interest rates and they started defaulting on their loans.

This caused 2007 to start with bad news from multiple sources. Every month, one subprime lender or another was filing for bankruptcy. financial firms and hedge funds owned more than $1 trillion in securities  backed by these now-failing subprime mortgages - enough to start a global financial tsunami if more subprime borrowers started defaulting.

It became apparent in August 2007 that the financial market could not solve the subprime crisis on its own and the problems spread beyond the UnitedState's borders. The interbank market froze completely, largely due to prevailing fear of the unknown amidst banks. Northern Rock, a British bank, had to approach the Bank of England for emergency funding due to a liquidity problem. By that time,central banks and governments around the world had started coming together to prevent further financial catastrophe.

central banks of several countries resorted to coordinated action to provide liquidity support to financial institutions. The idea was to put the interbank market back on its feet.The Fed started slashing the discount rate as well as the funds rate, but bad news continued to pour in from all sides.

http://www.wallstreetoasis.com/financial-crisis-overview:

Throughout September 2008 the US government and Federal Reserve had been searching for a way to stabilize the financial markets. The plan they devised was to buy troubled assets from the banks in order to reduce uncertainty in the markets. This plan was called the Troubled Asset Relief Program (TARP). TARP was tweaked slightly in October to allow the TARP program to buy equity stakes in the banks as well as buying the assets.

The US government had to ask Congress for $700 billion and was signed into law on October 3rd 2008. Many of the firms which took money from the TARP program have paid it back and until summer 2011 the financial markets stabilized and grew.

other sites:

http://www.theguardian.com/business/2008/dec/28/markets-credit-crunch-banking-2008

http://www.oecd.org/eco/42843570.pdf - THE GENERAL ECONOMIC BACKGROUND TO THE CRISIS

by Jørgen Elmeskov, Mumbai, 24-26 May, 2009

http://brechtforum.org/economywatch/financial-crisis-background-onset-economic-crisis-and-radical-responses

• 3. objawy i skutki kryzysu w sektorze publicznym

http://www.theguardian.com/society/2008/oct/15/banking-crisis-public-services :

jak eksperci to widzieli w chwili powstania kryzysu (The Guardian, Wednesday 15 October 2008):

Andrew Simms
Policy director, New Economics Foundation

Too many of us ended up believing in the reality of economic Narnia. Now it is left to the real economy of households, communities, natural resources and productive work to pick up the pieces. Standing in the wreckage of the old illusion, it's easier to see the importance of the operating systems that underlie and underpin the economy, which too often are undervalued and taken for granted.

Geoff Mulgan
Director, Young Foundation:

The first order effects are the immediate ones of lack of cash. Funding for the third sector will shrink: gifts from the public, funding from foundations and, with a lag, public grants and contracts. Corporate funding and support will decline. Worse, this is a crisis that has been exacerbated by the spike in costs for food and fuel, and there's a likelihood that after a fall next year we will be back to an era of higher inflation.

Mike Turley
Head of Deloitte's public sector practice:

The financial turmoil will impact significantly on the public sector. Public finances are aligned to economic performance by a sequence of complex, interconnected relationships, but the overall link between tax and services revenue and public expenditure is a key factor.

There are no easy answers for public sector leaders, but a rigorous programme of cost reduction in each organisation is the first step toward meeting the fiscal and delivery challenges of a downturn. 

http://hdr.undp.org/en/reports/global/hdr2010/papers/HDRP_2010_18.pdf: 2010-2018

*TU są fajne wykresy ale nie wiem jak je skopiowac bo są dziwnie zapisane

http://library.fes.de/pdf-files/gurn/00389.pdf

tutaj tez sa fajne wykresy i tez nie wiem jak je przeniesc. poza tym do kazdego stwierdzenia sa przyklady miliona pasntw i ich szczegolowe opisy ale tego jest od cholery wiec po proatu jesli chcesz to mozesz cos skoiowac ale ja juz tego nie robilam do kazdego bo by nam samego tego 15str wyszlo ;)

Dane z 2010r.:

tu: The definition of ‘public sector employment’ corresponds to the NACE activity

classification used by Eurostat and comprises public administration, defence

and compulsory social security. Thus, it is a narrow concept of the public

sector as economic activities such as health services and education that are

often provided by public sector employees are not considered

Employment

Interestingly, in the large majority of countries, employment in the public sector grew over the entire period of observation, i.e. 1999 to 2008. the share of employment

in public administration total employment increased in the majority of EU

countries between 2008 and mid-2010.

The overall increase in employment in public administration in relation to

total employment in most EU countries recorded for the year 2010 is due to

two reasons. First, and most importantly, job losses have so far been lower

in the public than in the private sectors. Secondly, employment cuts in the

pubic sector that were planned in a number of EU countries are not yet visible in data recorded by the national and European statistical authorities. Plans to freeze and reduce public sector employment are typically

scheduled to run over several years and are just beginning to become effective.

The freezing and cutting of public sector workers’ wages was a common

response of governments in the effort to restore sound public finances (see

section 3). Wage cuts and freezes frequently become effective at a later period

than when they were first announced or imposed. However, it can be expected

that far-reaching reductions of public sector employees’ pay will soon become

observable in public statistics of a number of countries.

Wage levels are

generally higher in the public than in the private sector. Wage formation in the public sector is generally subject to market forces

to a lesser extent than in the private sector of the economy. Thus, it can

be concluded that wage growth in the public sector that is sheltered from

international competition exceeds wage growth in the private sectors. But also

institutional factors, such as the generally stronger organisational strength of

trade unions in the public sector compared to unions in the private sectors,

account for a wage-pushing effect of public sector wages (Crouch 1990;

Traxler et al. 2001; Traxler et al. 2008a and 2008b). On the other hand, public

sector wage growth strongly depends on political factors, e.g. the partisanship

of the government, restraints on public budgets (in particular the limits for

public deficits and debt ratios stipulated in the Stability and Growth Pact),

and is thus more volatile. Empirical evidence, however, indicates the volatility

of both public and private sector wage developments (albeit more strongly

so in the case of public sector wages). Volatility of both public and private

sector wages has shown a tendency to decrease since the advent of European Monetary Union, i.e. since the late 1990s. In the Euro area wage growth in

the public sector exceeded wage growth in the private sector between 2000

and 2005.

2-3 sections have shown that, across Europe, cuts in public sector

pay and other entitlements, as well as in employment, form – albeit to a

varying extent – a key element in most governments’ fiscal austerity measures.

A general observation was that collective bargaining as a mechanism to settle

wages in the public sector was decreasing in relevance. In all countries, with

the exception of Hungary and Lithuania where public sector wage restraint

was agreed in tripartite national pacts between the government, unions and

employers’ organisations, cuts and freezes of public sector workers’ wages

were unilaterally imposed by the state. Recent developments in collective

bargaining against the background of the economic crisis, on the one hand,

follow established trajectories of collective bargaining. On the other hand,

changes in the power configuration between public sector industrial relations

actors are observable. In line with established patterns of collective bargaining

and social policy concertation, social partners in most of the central and eastern

European countries were too weak to enter into tripartite negotiations with

the state and conclude social pacts to address the effects of the crisis (Glassner

and Keune, 2010). Even in those countries where tripartite agreements were

concluded, for instance Hungary and Lithuania, trade unions’ demands were

taken into account only partially. In countries such as Ireland, Portugal,

Spain, Italy and the United Kingdom public sector employers have bypassed

established collective bargaining procedures and imposed pay cuts and pay

freezes unilaterally.

The public

sector represents a traditional stronghold of unions and strike activity against

crisis-induced cost-saving measures was higher in this sector than in the

private sectors. In Greece, Italy, Spain, Portugal and France trade unions were

able to channel protest against plans to cut social expenditure and mobilise

citizens for general strikes. However, governments’ attempts to reduce public

sector employment will certainly weaken the political influence of unions in

the medium term.

http://blogs.telegraph.co.uk/finance/ianmcowie/100012147/public-sector-pensions-must-share-the-pain-of-this-global-financial-crisis/

http://hdr.undp.org/en/reports/global/hdr2010/papers/HDRP_2010_18.pdf: 2010-2018

*TU są fajne wykresy ale nie wiem jak je skopiowac bo są dziwnie zapisane

Human Development

Research Paper

2010/18

The Global Financial Crisis of 2008-10:

A View from the Social Sectors

Sara Guerschanik Calvo

Public sector social expenditures

Public sector social expenditures have suffered during past crises in several developing

countries. The need to close the fiscal deficit in the face of lower tax revenues and increased public debt service has typically led to cuts in social expenditures. While sustained social expenditure is necessary, it is not sufficient to ensure good

outcomes. Efficient spending is also necessary. To achieve this several social programs have

been established in developing countries, some more effective than others. The common features

of these programs are “accountability between policymakers, providers and citizens” (World

Bank 2003) and these programs’ ability to address short-term objectives while contributing to the

achievement of long-term goals. Examples include Bangladesh’s Food-for Education, Brazil’s

Bolsa Escola, and Mexico’s Progresa. In fact, the city of New York is considering establishing

its own Progresa. These so-called cash (or food) transfer programs have been a source of income

(and non-income services) for the poor, somewhat compensating for their inability to procure

credit to smooth out consumption during the bad times.

http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Economic_Mobility/Cost-of-the-Crisis-final.pdf:

na str 10 kolejny fajny wykres, ktorego ni eumiem skopiowac. I w ogóle tu jest tez dużo fajnych wykresików

In effect, the events of September and October 2008 were a severe negative shock to American confidence in the economy, and in the ability of our government and our political system to deal with the crisis. All at once, families and businesses across the United States looked at the crisis and stopped spending—even those who had not yet been directly affected by the mounting credit disruption that started in August 2007 put a hold on their plans. Families stopped spending, while firms stopped hiring and paused investment projects. As a result, the economy plunged, with GDP falling by 5.4 percent and 6.4 percent (at annual rates) in the last quarter of 2008 and the first quarter of 2009—the worst six months for economic growth since 1958.

http://en.wikipedia.org/wiki/Global_Financial_Crisis#Wealth_effects :D

Wealth effects[edit]

The New York City headquarters of Lehman Brothers

There is a direct relationship between declines in wealth, and declines in consumption and business investment, which along with government spending represent the economic engine. Between June 2007 and November 2008, Americans lost an estimated average of more than a quarter of their collective net worth

http://onlinelibrary.wiley.com/doi/10.1111/an.2008.49.9.24/abstract

• -||- w sektorze prywatnym

http://econ.tu.ac.th/archan/rangsun/ec%20460/ec%20460%20readings/Global%20Issues/Global%20Financial%20Crisis%202007-2009/Academic%20Works%20By%20Instituion/UNDP/Financial%20Crisis%20of%202008%20and%20LDCs.pdf :

Reduction in export earnings

The IMF expects growth in world trade to decline from 9.4 per cent in

2006 to 2.1 per cent in 2009.9 The expected declines will come through a combination

of a decline in commodity prices, a decline in demand for their goods from advanced

economies and a decline in tourism. These are briefly assessed.

Declines in commodity prices will be detrimental to the export earnings of a large

number of countries that are major exporters of commodities. Non-energy commodity

prices are predicted by the World Bank to decline by 19 per cent in 2009.10 A large

proportion of countries dependent on commodity prices are in Africa. Over the past

seven years, prices of many commodities, including copper, nickel, platinum and

petroleum, have risen to record highs, and contributed significantly to good growth in

these countries. However, since September 2008 commodity prices have been declining.

The price of oil fell by more than 70 per cent in the second half of 2008. As the price of these declined, the country, already with a large

balance-of-payments deficit, faced further pressure on its trade account, and saw the

value of its currency, the rand, declining precipitously further—by almost 40 per cent—

against the US dollar. PGM mining companies have recently announced the

retrenchment of around 10,000 workers. Significant foreign investments in the country’s

mining industry have also been put on hold.

But it is not just commodity-dependent countries that will be adversely affected. A

recession in the United States and other G7 countries will in general reduce the demand

for their exports, as these markets are important destinations of developing-country

exports. A significant proportion of US imports are from developing countries. Many of

these imports are also imports of services, not just goods. Thus, there are already signs

that India’s software sector, which exports IT services to the United State, for instance,

and other advanced economies are registering slower growth.

Another important source of foreign currency earnings in many developing countries is

tourism. Since September 2008 the number of air passengers in the world has dropped

Sharpy

Reduction in financial flows to developing countries

As a group, developing countries require financial inflows from the rest of the world to

facilitate and accelerate economic growth, trade and development. These flows include

official development assistance (ODA), investment flows (both portfolio and foreign

direct investment (FDI), trade credits and flows of remittances. All of these are set to be

affected negatively during the current crisis. Cali, Massa and Te Velde (2008) estimate

the decline in financial resources to developing countries to be around US$300 billion.

ActionAid gives a higher estimate of US$400 billion on the decline.

Possible outcomes

A valid global concern is that the possible combination of banking failures and

reductions in domestic lending, reductions in export earnings, and reductions in

financial flows to developing countries will end up reducing private sector investments

and household consumption. This in turn will lead to reduced government expenditure,

as governments will now face the higher cost of raising funds coupled with less tax

income. Together, low investment, consumption and government expenditure could

spell higher unemployment and poverty across the developing world

taka tabelka na str 12

(…)

Although developing countries will be

affected in the form of lower growth, higher unemployment and poverty, and changes in

inequality, it has been argued in this paper that there are many and various channels for

the impact to affect countries differently, depending on the extent to which they are

vulnerable to particular channels. Smaller, highly indebted countries significantly

dependent on the US economy will be most severely affected. However, many

developing countries, from many in Africa to the large emerging markets of Brazil,

China and India, will continue to grow at relatively strong rates, cushioning the impact

for others.

http://www.tradeforum.org/The-Impact-of-the-Global-Financial-Crisis-on-Public-Private-Partnerships/

Before the second half of 2008 private activity in infrastructure looked set to continue the encouraging trends of the previous half-decade. The global financial crisis has disrupted these trends. Investment in Central Asia and Europe fell by 54 per cent between July 2008 and March 2009. Some other regions saw investment fall as well.

http://www.enterprise-development.org/page/the-global-financial-crisis

http://www.imf.org/external/np/exr/facts/privsec.htm

http://www.imf.org/external/pubs/ft/series/01/privsecp.pdf

• różne sposoby reakcji państwa i jego kasy

http://econ.tu.ac.th/archan/rangsun/ec%20460/ec%20460%20readings/Global%20Issues/Global%20Financial%20Crisis%202007-2009/Academic%20Works%20By%20Instituion/UNDP/Financial%20Crisis%20of%202008%20and%20LDCs.pdf

There is no ‘commonly accepted theory of financial crisis’ to provide fail-proof advice

on the correct policies that each particular country should adopt in the wake of the crisis

(Jonung 2008: 566). However, from past experiences of financial crises and given the

analysis of the origin and likely impacts of the current crisis, the likely responses

required in developing countries would need to include immediate, short-term

(stabilization) and long-term (structural) policy responses.

Immediate and short-term policy responses are required to ensure that (i) the financial

crisis is contained, (ii) that confidence in financial systems is restored and that

(iii) the impact on the real economy is minimized. Over the longer term, countries

should focus on strengthening their financial systems within the context of reforming

the global financial architecture. Domestic financial development depends on a better

global financial architecture and vice versa

http://www.nber.org/papers/w4375.pdf?new_window=1 – conclusion sites 25-27, especially 1^st “akapit”

http://www.voxeu.org/article/what-be-done-and-whom-five-separate-initiatives

There are five separate initiatives the authorities need to follow to contain the crisis, reverse some of its effects, and prevent it from happening again. National authorities are best positioned to respond quickly to contain the crisis, international initiatives are required to avoid repetition, and some combination of the two is best suited to reversing its effects.

National authorities can best contain the crisis through two measures.

First, as Willem Buiter has argued, they must revive inter-bank markets by providing a temporary guarantee for short-term unsecured lending between regulated institutions. Central bank disintermediation of inter-bank markets is more costly and less sustainable.

Second, national authorities should also inject preference share capital to institutions that need it on condition of a partial swap of “old” debt for equity. Such involvement by government is best carried out at arms length – in Europe’s case, the European Investment Bank may be a good vehicle.

The third thing the authorities should do is to support a more immediate reversal of this process by facilitating the creation of long-term liquidity pools to purchase assets – rather like John Pierpont Morgan’s 1907 money trusts.

http://www.ids.ac.uk/files/dmfile/IFPBFinCrisis7.1FINAL.pdf

Policy recommendations on

Policy recommendations on

poverty impacts of the crisis

••Invest in better early warning poverty

and vulnerability data systems for rapid

release of quantitative and qualitative

indicators of the impacts of the crisis on

poor people.

••Seize on opportunities to strengthen

and implement social protection systems

and programmes and develop long-term

programmes through global partnerships.

••Aid-led finance is urgently needed to

expand social protection in poor

countries lacking fiscal space.

••Support vulnerable businesses,

particularly in rural areas coping with

shortages of credit and reduced

demand in export markets.

http://www.keepeek.com/Digital-Asset-Management/oecd/economics/the-effectiveness-of-monetary-policy-since-the-onset-of-the-financial-crisis_5k41zq9brrbr-en#page75 + wykresy stąd

http://hdr.undp.org/en/reports/global/hdr2010/papers/HDRP_2010_18.pdf - czego się nauczyliśmy – końcówka

to buffer the impact of financial crises on human development the following lessons have been learned:

• to lessen economic adjustment when external financing becomes scarce, keep high

international reserves and reserve and liquidity requirements to lower vulnerability

to debt-rollover and currency risk.

• to avoid potentially regressive palliative measures during a crisis, build stronger

regulatory and supervisory structures for the financial system and comprehensive

insurance mechanisms during economic stability.

• to allow firms to adjust fast, have in place an effective bankruptcy regulatory

framework.

• to provide immediate social protection, have in place an efficient system of public

sector delivery.

https://www.google.pl/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CDEQFjAA&url=http%3A%2F%2Fwww.researchgate.net%2Fpublication%2F228293718_The_Real_Effects_of_Financial_Sector_Interventions_During_Crises%2Ffile%2Fd912f5107dba02c5c2.pdf&ei=ailtUo6tAcnh4QSfiYGgDg&usg=AFQjCNFqF56OItlh_1fu-G2SN73TodIdVQ&sig2=lyW6JHw1Iz6MdMlqWeUstA&bvm=bv.55123115,d.bGE :

The most direct way to alleviate a capital crunch is through direct capital injections.

Public sector recapitalizations, mostly in the form of common and preferred stocks, took

place in roughly half of the countries in our sample (figure 1).

However, there are alternative ways to alleviate the effects of a capital crunch and these other options are commonly used around the same time as bank recapitalization policies are announced. These policies include asset purchases, guarantees, and liquidity support. These alternatives do not offer capital support, but also alleviate disruptions in the supply of credit.

• CO USA PODPISŁAŁY - Dodd-Frank Wall Street Reform Act:

http://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act !!!!!!!!!!!!!!!!!!!!!!!!!!

http://useconomy.about.com/od/criticalssues/p/Dodd-Frank-Wall-Street-Reform-Act.htm -

The Dodd-Frank Wall Street Reform Act was the most comprehensive financial reform since the Glass-Steagall Act. Like Glass-Steagall, it sought to regulate the financial markets and make another economic crisis less likely

It was introduced by Senator Chris Dodd on March 15, 2010 and passed by the Senate on May 20.

The bill was revised by Congressman Barney Frank and approved by the House on June 30. On July 21 2010, President Obama signed the Dodd-Frank Wall Street Reform Act into law

Dodd-Frank proposed eight areas of regulation. Here are the major parts of the Act.

Regulate Credit Cards, Loans and Mortgages

The CFPB regulates credit fees, including credit, debit, mortgage underwriting and bank fees. It protects homeowners in real estate transactions by requiring they understand risky mortgage loans. It also requires banks to verify borrower's income, credit history and job status

Oversee Wall Street:

The Financial Stability Oversight Council looks out for risks that affect the entire financial industry. It also oversees non-bank financial firms like hedge funds. If any of these companies get too big, it can recommend they be regulated by the Federal Reserve, which can ask it to increase its reserve requirement.

Stop Banks from Gambling with Depositors' Money:
Dodd-Frank gave banks seven years to divest the funds. They can keep any funds if that are less than 3% of revenue. Banks have lobbied hard against the rule, delaying its implementation until at least 2013.
Regulate Risky Derivatives:

Dodd-Frank required that the riskiest derivatives, like credit default swaps, be regulated by the Securities Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). In this way, excessive risk-taking can be identified and brought to policy-makers' attention before a major crisis occurs.

Bring Hedge Funds Trades Into the Light:

One of the causes of the 2008 financial crisis was that, since hedge funds and other financial advisers weren't regulated, no one knew what they were investing in or how much was at stake. To correct for that, Dodd-Frank says that hedge funds must register with the SEC and provide date about their trades and portfolios so the SEC can assess overall market risk. States are given more power to regulate investment advisers, since Dodd-Frank raises the asset threshold limit from $30 million to $100 million.

Reform the Federal Reserve:

The Government Accountability Office(GAO) was allowed to audit the Fed's emergency loans during the financial crisis. It can review future emergency loans, when needed. The Fed cannot make an emergency loan to a single entity,

• przykłady państw ?? na razie tylko wypisałam tu linki bo nie wiem czy będziemy w ogole tak oddzielnie o tym pisac?

http://www.economist.com/news/europe/21587811-mariano-rajoy-predicts-economic-joy-spain-still-has-long-way-go-worst-may-be-over?zid=295&ah=0bca374e65f2354d553956ea65f756e0 hiszpania

http://www.economist.com/blogs/freeexchange/2013/09/monetary-policy-2?zid=295&ah=0bca374e65f2354d553956ea65f756e0 usa

http://www.economist.com/news/europe/21586887-party-freedom-benefits-dutch-austerity-fatigue-not-so-calvinist-any-more?zid=295&ah=0bca374e65f2354d553956ea65f756e0 dutch

http://198.173.123.103/pdf/ESH94FA%20Parte%201.pdf

http://www.keepeek.com/Digital-Asset-Management/oecd/economics/the-effectiveness-of-monetary-policy-since-the-onset-of-the-financial-crisis_5k41zq9brrbr-en#page75 wykresy stąd

Cyclicality of Deficits

Let us contrast the behavior of fiscal variables in advanced economies vis a vis emerging

economies. Beginning with an example, we contrast the experience of Italy during the

1980s with that of Argentina and Brazil in the late 1990s. Each of these country-episodes is

known for a high fiscal deficit within its respective comparison group and the centrality of

the deficit in public debate about macroeconomic outcomes. Panel (a) in Figure 3 presents

the evolution of public debt and overall fiscal deficit as a percentage of GDP for Italy during

the 1980s. Debt is reported on the left axis while the deficit is measured on the right axis.

Panels (b) and (c) repeat this figure for Argentina and Brazil, respectively, during the late

1990s. It is apparent from this figure that both the level and change of public debt (i.e.

roughly public deficits) are significantly larger for Italy than for Argentina and Brazil in

the relevant periods. While the maximum deficit in Italy was above 15%, it was below 4%

in Argentina. Public debt in Italy was more than twice as large as in Argentina and Brazil. It is also interesting to point out, although this is not the main point that concerns us in

this section, that Brazil made a significant effort to reduce its deficits while Argentina did

not.

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http://onlinelibrary.wiley.com/doi/10.1111/j.1758-5899.2010.00046.x/pdf

https://www.google.pl/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CDEQFjAA&url=http%3A%2F%2Fwww.researchgate.net%2Fpublication%2F228293718_The_Real_Effects_of_Financial_Sector_Interventions_During_Crises%2Ffile%2Fd912f5107dba02c5c2.pdf&ei=ailtUo6tAcnh4QSfiYGgDg&usg=AFQjCNFqF56OItlh_1fu-G2SN73TodIdVQ&sig2=lyW6JHw1Iz6MdMlqWeUstA&bvm=bv.55123115,d.bGE