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POLITICAL ECONOMY OF GLOBAL BANKING CRISES

POLITICAL ECONOMY OF GLOBAL BANKING CRISES. MUSTAFA AKAYDIN HALİL BÜLBÜL. REASONS OF GLOBAL BANKING CRISIS. United States housing bubble. Higher interest rates in adjustable rate mortgages. Increase in loan incentives. Easy credit conditions. Sub-prime lending. Predatory lending.

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POLITICAL ECONOMY OF GLOBAL BANKING CRISES

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  1. POLITICAL ECONOMY OF GLOBAL BANKING CRISES MUSTAFA AKAYDIN HALİL BÜLBÜL

  2. REASONS OF GLOBAL BANKING CRISIS • United States housing bubble. • Higher interest rates in adjustable rate mortgages. • Increase in loan incentives. • Easy credit conditions. • Sub-prime lending. • Predatory lending. • Deregulation. • Over-leveraging.

  3. US Current Account on Trade Deficit

  4. REASONS OF GLOBAL BANKING CRISIS • United States housing bubble. • Higher interest rates in adjustable rate mortgages. • Increase in loan incentives. • Easy credit conditions. • Sub-prime lending. • Predatory lending. • Deregulation. • Over-leveraging.

  5. US Subprime Lending Expanded Significantly 2004-2006

  6. REASONS OF GLOBAL BANKING CRISIS • United States housing bubble. • Higher interest rates in adjustable rate mortgages. • Increase in loan incentives. • Easy credit conditions. • Sub-prime lending. • Predatory lending. • Deregulation. • Over-leveraging.

  7. Leverage Ratios for Major Investment Banks

  8. COMPARING THE RECENT CRISIS TO THE PAST • 2008-2009 banking crisis far exceeds from past crises. • Current banking crisis is much larger than the Great Depression in scale. • More bank branches in 2008-2009 banking crisis than Great Depression.

  9. COMPARING THE RECENT CRISIS TO THE GREAT DEPRESSION

  10. U.S. Bank Failures, 1970-2009

  11. U.S. Bank Failures, 1930-2009

  12. Assets of Failed Banks and GDP

  13. Assets of Failed Banks and GDP

  14. Assets of Failed Banks and GDP

  15. EFFECTS OF GLOBAL BANKING CRISIS • Impact in the USA • Unemployment • Poverty • Prices • Private and Public Transfers • Assets and Goods and Services • Effects on Developing Countries

  16. Impact in the USA

  17. Impact in the USA

  18. EFFECTS OF GLOBAL BANKING CRISIS • Impact in the USA • Unemployment • Poverty • Prices • Private and Public Transfers • Assets and Goods and Services • Effects on Developing Countries

  19. World map of countries by rate of unemployment

  20. EFFECTS OF GLOBAL BANKING CRISIS • Impact in the USA • Unemployment • Poverty • Prices • Private and Public Transfers • Assets and Goods and Services • Effects on Developing Countries

  21. Impact of global financial crisis on poverty

  22. EFFECTS OF GLOBAL BANKING CRISIS • Impact in the USA • Unemployment • Poverty • Prices • Private and Public Transfers • Assets and Goods and Services • Effects on Developing Countries

  23. Effects on Developing Countries

  24. SOLUTIONS OF GLOBAL BANKING CRISIS • Deposit Insurance • Bank Support • Prompt Closure and Payout

  25. THE END

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