Managerial and Supervisory Mistakes Leading to Foreseeable Consequence: Global Financial Crisis

Managerial and Supervisory Mistakes Leading to Foreseeable Consequence: Global Financial Crisis

KURNAZ, Niyazi
TOPAL, Hanife
KAYIK, Mustafa
ÖZKAN, Harika

The global financial crisis that began in summer 2007, deepened in 2008 and looks set to run for some time and to have profound effects on the global economy. For the 2007 subprime crisis, we consider that there are also some particular aspects which characterize the actual crisis, like the increased role of financial innovations (the securitization and credit derivatives) and a very important contagion phenomenon which began within the American economy and spread over the global financial markets. The subprime crisis extended at international level, following four main directions: at the root of the crisis lies a fundamental inconsistency between financial globalization – the process of liberalization and deregulation driving the impressive growth of world financial markets – and existing public rules and policies at both domestic and international levels. On the other hand; complex corporate structures managing financial innovation causing excessive risk taking and excessive leverage due to lack of adequate supervision enhanced the global disease. In this paper after discussing the causes of the global financial crisis, we will put forward ways and policies to overcome the ongoing crisis in global level.

Conference or Workshop Item
PeerReviewed

2010-06

154