Exit Strategies from The Global Crisis

Authors: Petr Teply

Abstract:

While the form of crises may change, their essence remains the same (such as a cycle of abundant liquidity, rapid credit growth, and a low-inflation environment followed by an asset-price bubble). The current market turbulence began in mid-2000s when the US economy shifted to imbalanced both internal and external macroeconomic positions. We see two key causes of these problems – loose US monetary policy in early 2000s and US government guarantees issued on the securities by government-sponsored enterprises what was further fueled by financial innovations such as structured credit products. We have discovered both negative and positive lessons deriving from this crisis and divided the negative lessons into three groups: financial products and valuation, processes and business models, and strategic issues. Moreover, we address key risk management lessons and exit strategies derived from the current crisis and recommend policies that should help diminish the negative impact of future potential crises.

Keywords: exist strategy, global crisis, risk management, corporate governance

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1057685

References:

[1] J. Cheng, , M. Walsh, , S. Flax, "Demystifying the Credit Crunch : A Primer and Glossary." Arthur D. Little. 2008. Available: .
[2] R. Chalupka, P. Teply, "Operational Risk Management and Implications for Bank-s Economic Capital - A Case Study", IES Working Papers No.14. Charles University, 2008. Available: .
[3] ECB, EU Banking Sector Stability, 2007. Available: . ISSN 1725-555.
[4] F. J. Fabozzi, V. Kothari, Introduction to Securitization. 1st ed. Oxford: Wiley, 2008.
[5] F. J Fabozzi et al. Subprime Mortgage Credit Derivatives. Viley, 2008.
[6] IMF, Global Financial Stability Report: Containing Systemic Risks and Restoring Financial Soudness. International monetary Fund: World Economic and Financial Surveys, 2008. Available: .
[7] M. Mejstrik, M. Pecena, P. Teply. Basic Principles of Banking. Czech Republic : Karolinum press, 2008.
[8] M. Rippel, , P. Teply, Operational Risk - Scenario Analysis : IES Working Papers No. 15. Charles University, 2008. Available: .
[9] S S. Roach, Pitfalls in a Post-Bubble World. Morgan Stanley. 2008 Available: .
[10] P. Teply, The Truth About The 2008-2009 Crisis: A Hard Lesson for The Global Markets. VDM Verlag, Germany, 2010.
[11] M. Zeleny, World financial crisis has long roots. Czech Business Weekly No. 39, 2008 Available: .