Boards’ inability to effectively self-regulate firms Prior to the GFC, poor regulation by boards left financial institutions vulnerable to economic downturns. Short-term profits and market share were the primary concern of banks, with Chuck Prince, former CEO of Citibank, declaring “while the music is playing, you have to dance”. 
While the Global Financial Crisis originated in developed countries, developing countries were not immune to its effects. Reduced foreign investment, trade and remittances had a significant impact on the economies of the world’s poorest countries. The crisis manifested itself in growing budget and trade deficits, currency devaluations, higher rates
Deutsche Bank has been scrutinised and surrounded by controversy in relation to its conduct leading up to the Global Financial Crisis. However, when the facts are distilled from the myths and stigma, what is revealed is an admirable recovery by the institution, despite tumultuous economic times and the bad publicity.
Australia, a few key themes tend to spring up: success, the theories of John Maynard Keynes, and increased production. A bit of context is in order. Firstly, Australia successfully avoided a recession during one of the most impactful global crises in decades. Secondly, John Maynard Keynes is the mind behind
Australia has imported capital for most of its history, which has allowed investment to consistently exceed the volume of domestic savings. As a result, Australia has enjoyed the benefits of a larger capital stock which, through lifting the amount of capital per worker, has resulted in a more productive workforce,
Common explanations put forth for the financial crisis of 2007-2008 have been rather simplistic, scratching the surface of issues caused by decades of structural changes in the global economic environment. One widely held understanding of the crisis nominates the vast sub-prime mortgage default in the USA as the primary catalyst.
In January 2009, in the midst of the Global Financial Crisis, Olivier Blanchard, then Chief Economist of the International Monetary Fund, wrote “Crises feed uncertainty. And uncertainty affects behavior, which feeds the crisis. […] [Uncertainty] affects consumption and investment decisions, and is largely behind the dramatic collapse in demand we have
In the aftermath of the Global Financial Crisis, economists from all around the world – despite failing to predict the crisis – felt strong enough to offer their advice as to how we could pull ourselves out of the abyss. The conversation was roughly divided between two contrasting views. One group of
You may have never heard of David Stockman, who made his a career as a U.S. government budget-maker turned high-powered private equity financier. But you may be interested in his book, which attempts to unravel the 2008-09 global financial meltdown. I started reading it during the examination period and
I wonder if Bill Clinton’s master campaign strategist, James Carville, ever thought that his maxim “it’s the economy stupid” would be trotted out on news broadcast after another, 20 years after coining it. It may be a simplistic phrase to describe the trials and tribulations of election-year politics,
The Australian economy continues to defy economic gravity, with the latest round of economic statistics released last week showing an economy growing above trend over the last 12 months, full-time job creation ticking up in May, and a higher participation rate as people become more confident in finding a job.
In recent years, Australian households have been saving a significantly larger proportion of their disposable income than in the previous two decades. Although the December quarter’s National Accounts data revealed a slight easing in the household saving ratio, the overall picture remains the same. Following a significant spike in