The concept related to currency stability includes internal currency stability as intern price stability, the money demand and supply stability and the stability of the interest rate. Also it includes external currency stability through exchange rate mechanism. The equilibrium of national...

The global financial crisis has brought to the forefront the need for executives to better understand the uses and limitations of the structural models frequently employed in the valuation and risk management activities of their firms. The mandate to better manage systemic risk exposure,...

This paper summarizes my ideas about the causes of and solutions to the 2008 financial crisis and is intended to be written so that a non-specialist can grasp the content and contribute to the discussion. The first section focuses on the immediate causes of the crisis and the appropriate...

The failure of academic finance can be considered one of the symbols of the financial crisis. Two important underlying reasons why academic finance models systematically fail to account for real-world phenomena follow directly from two conventions: (a) treating economics not as a „true‟...

The financial services industry went through a dramatic turn of events during the past year or so, to an extent that many were questioning its long-term viability and sources of strength. While it is imperative that we try and learn as much as we can from past mistakes to prevent them from...

The aim of this work is to assess the impact of financial crises on output for 11 European transition economies (CEECs). The results suggest that financial crises have a significant and permanent effect, lowering long-term output by about 17 percent. The effect is more important in smaller...

Arbitrage normally ensures that covered interest parity (CIP) holds. Until recently, excess profits, if any, were documented to last merely seconds and reach a few pips. Instead, this paper finds that following the Lehman bankruptcy, these were large, persisted for months and involved strategies...

The recent financial crisis has intensified the debate on optimal financial supervision architecture. A broad consensus has emerged around the view that an inadequate regulatory framework and a fragmented supervisory architecture, both nationally and internationally, has not only been at the...

The location of financial activities is traditionally characterized by a great deal of inertia. However, the 2007-10 crisis may considerably modify the geography of finance and cause an upheaval in world hierarchy. The crisis hit the Western countries directly and the main financial centers have...

The recent financial crisis teaches important lessons regarding the lender-of-last resort (LLR) function. Large swap lines extended in 2007-08 from the Federal Reserve to other central banks show that the classic concept of a national LLR fails to address key vulnerabilities in a globalized...