The Evidence and Impact of Financial Globalization

Chapter 48

A Cross-Country Perspective on the Causes of the Global Financial Crisis

S. Claessens*,^{†, ‡}, G. Dell’Ariccia*,^‡, D. Igan* and L. Laeven*,^{‡, §}

^*International Monetary Fund, Washington DC, USA

^†University of Amsterdam, Amsterdam, The Netherlands

^‡CEPR, London, UK

^§Tilburg University, Tilburg, The Netherlands

Outline

Introduction

Causes of the Crisis

Commonalities with Previous Crises

Asset price bubbles

Credit booms

Marginal loans and systemic risk

Regulation and supervision

New Dimensions of the Crisis

Increased opaqueness

Financial integration and interconnectedness

The role of leverage

Central role for households

The Evolution of the Crisis

The Channels and Mechanisms of the Crisis

Government Interventions to Resolve the Crisis

Conclusions: ...