Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Sunday, April 5, 2009

Muradoglu on the UK Financial Crisis

The UK Crisis of 2008: What is Real and What is Behavioural?, by Yaz Gulnur Muradoglu, City University London - Sir John Cass Business School, was recently posted on SSRN.  Here is the abstract:

This paper is about the crisis of 2008 in the UK. I first discuss the triggers of the crisis in the UK, then go over the immediate reactions to it in the form of short term policies and conclude with a discussion of long term policies. The crisis of 2008 has its roots in the sub-prime crisis of the US. UK imported it due to its well developed and international financial sector. Some of the triggers of the crisis of 2008 are real and some are behavioural. Systemic nature of high leverage in all sectors including financial, corporate and household, international nature of financial sector, and opacity of balance sheets are the real triggers. The underestimation of risks by almost all agents in the economy is behavioural. I argue that some of the conditions that led to the Crisis of 2008 will not change and should be regulated. Behavioural factors should now be considered carefully in designing the new regulation

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Good post.Financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value..

Posted by: otcbb stocks | Apr 29, 2009 10:42:31 PM

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