Global financial crisis after ten years: a review of the causes and regulatory reactions

Abstract

Purpose

The purpose of this paper is to review the relevant literature on the causes of and regulatory reactions to the financial crisis of the last decade, popularly known as the “Global Financial Crisis (GFC)” or the “Housing Crisis” in the USA.

Design/methodology/approach

This review primarily focuses on the four main causes of the crisis, namely, excessive household leverage, securitization, corporate governance and credit ratings. The main reaction vis-à-vis recovery measures taken by most governments were quantitative easing (QE), bailouts and more stringent regulations of banks, though the discussion mainly focuses on QE.

Findings

In this paper, the authors summarize the literature on the causes and regulatory reactions to the GFC and propose future avenues of research for various topics.

Originality/value

Research on the GFC spans multiple disciplines as well as multiple facets of financial economics. A review paper such as this should help future researchers in generating ideas and gathering information for their research. Given that no review uncovers all worthy papers, the authors apologize in advance to the authors of any papers that the authors have inadvertently not reviewed in this paper.

Citation

Hossain, A.T. and Kryzanowski, L. (2019), "Global financial crisis after ten years: a review of the causes and regulatory reactions", Managerial Finance, Vol. 45 No. 7, pp. 904-924. https://doi.org/10.1108/MF-09-2018-0453