Home  Journals  Finance and Credit  30(366) – 2009 August

International Bank System in a Time of Financial Crisis

Available online: 17 September 2009

Subject Heading: Financial crisis

JEL Classification: 

This article discusses some ideas and issues about banks on the temporary international financial market. In the current crisis, the article traces the sources and channels of financial distress, and provides policy advice on mitigating its effects on bank activity, stemming contagion, and mending the global financial system. The global financial system remains under severe stress as the crisis broadens to include the banking sectors in both advanced and emerging market countries. One fundamental cause of the crisis was a change in the business model of banking, mixing credit with equity culture. When this model was combined with complex interactions from incentives emanating from macro policies, changes in regulations, taxation, and corporate governance, the current crisis became the inevitable result. The paper points to the need for far-reaching reform for a more sustainable situation in the future.

Keywords: bank system crisis, international banking, financial crises, toxic assets

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ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

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