Banking crisis causes?
Get flash to fully experience Pearltrees
, the prominent financier, avoids using the financial contracts known as derivatives “because we don’t really understand how they work.” , the investment banker who saved New York from financial catastrophe in the 1970s, described derivatives as potential “hydrogen bombs.” And presciently observed five years ago that derivatives were “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.” One prominent financial figure, however, has long thought otherwise.
Alan Greenspan
The Credit Crisis Is Going to Get Worse - WSJ.com
And I'm afraid they are doing the same thing again in 2009/2010. Let's see when the interest rates increase again... by Jan 8
Blanchard: “As the crisis slowly recedes, it’s time for a reassessment of what we know about how to conduct macroeconomic policy.”
Survey: IMF Explores Contours of Future Macroeconomic Policy
Olivier Blanchard, normally at MIT but currently the chief economist at the IMF, has released an interesting and important paper on how the crisis has changed, or should have changed, how we think about macroeconomic policy. The most surprising conclusion, presumably, is the idea that central banks have been setting their inflation targets too low:
The Case For Higher Inflation - Paul Krugman Blog - NYTimes.com
Discussions about the current crisis often present events in a sequence, such as that the US sub-prime crisis in August 2007 triggered a major inter-bank credit crisis, which transformed itself into a general credit crisis, the latter having an impact on the real economy and overall business and consumer confidence. However, it is interesting to investigate what was actually happening to the real sector, especially productivity trends, in the major OECD member economies before the crisis.
Did a productivity slowdown cause the financial crisis? | vox -
