Global Financial Crisis

Week 1 Introduction to Glocal Financial Crisis

2019-1-24

What is Financial Crisis? A financial crisis happens when a panic or a fear of the panic effects the overall functioning of the financial system. The panic is the event whereby we lose confidence in our ability to transform long-lived assets into money type subsitutes, and a financial crisis is the reaction to that.

If the panic happens and drains bank or other fianancial institution’s ability to do any lending, then all of a sudden this can have an effect on the real economy.

一定有什么事情发生，导致这种panic咯，失业？战争？银行乱放贷？

Why study the Global Financial Crisis It is a big part of history, and it could happen again in the future. We need to recognise it when it happens, what the build up looks like before we get to it. And we want to prevent it from happening again.

Great Depression The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. The timing of the Great Depression varied across nations; in most countries it started in 1929 and lasted until the late-1930s

Quiz 1

The Big 5 over the last century included: Japan, Sweden, Finland, Norway and Spain.

Mania produces panic.

What causes financial crisis?

• Financial system are inherently fragile.