Global Economic System, The: How Liquidity Shocks Affect Financial Institutions and Lead to Economic Crises, 1st edition

Published by FT Press (June 12, 2011) © 2011
  • George Chacko
  • Carolyn L. Evans
  • Hans Gunawan
  • Anders Sjoman

Title overview

This is the first professional-level authoritative guide to today's global financial system: how it works, how its elements fit together, and the vulnerabilities that can cause it to fail. Writing for working financial professionals and other sophisticated readers, the authors thoroughly explain the modern global credit system; the roles of banks, hedge funds, insurers, central banks, mortgage markets, and other participants; and the credit-related instruments they rely on. In particular, the authors illuminate the crucial importance of liquidity, and show why liquidity failures have been the key cause of all major market crashes for the past several decades. The Global Financial System thoroughly examines economic environments in which slow de-leveraging leads to prolonged sluggish growth, and compares today's environment to other periods of deleveraging, such as the Great Depression and the Japanese economic meltdown of the '90s and '00s. It predicts potential pathways for the current crisis, and offers essential guidance to both policymakers and investment decision-makers.

A sophisticated, higher-level look at financial institutions in the new global economy, how they are interconnected, and why they fail.

 

  • Explains the interconnected, interdependent global financial world in the context of recent market crises and other events.
  • Includes a thorough discussion of the core cause of most major market and economic crashes: failures of liquidity.
  • Not a beginner's book: designed for readers who already understand the basics of finance, including working professionals and advanced students.

    • Table of contents

    Chapter 1: Motivation for Understanding Liquidity Risk     1

    Chapter 2: Liquidity Risk: Concepts     11

    Chapter 3: The Great Depression     59

    Chapter 4: Japan’s Lost Decade     105

    Chapter 5: The Great Recession     173

    Chapter 6: Conclusion     247

    Index     261

    Author bios

    George Chacko is Associate Professor of Finance at Santa Clara University’s Leavey School of Business and formerly Associate Professor at Harvard Business School, Managing Director at State Street Bank, and Chief Investment Officer at Auda Alternative Investments. He holds a Ph.D. and M.A. in Business Economics from Harvard University and a B.S. from MIT.

     

    Carolyn L. Evans is Associate Professor of Economics at Santa Clara University. She has worked at the Federal Reserve Bank of New York, the Federal Reserve Board of Governors, and the White House Council of Economic Advisers. She holds a Ph.D. and M.A. in Economics and a B.A. in East Asian Languages and Civilizations, all from Harvard University.

     

    Hans Gunawan is Senior Financial Analyst at Skyline Solar and formerly a manager of financial planning and analysis at JAPFA. He holds an MBA from Santa Clara University and a B.S. from University of California, Berkeley.

     

    Anders Sjöman is Vice President of Communications at Voddler. He was formerly Senior Researcher for Harvard Business School’s Paris-based Europe Research Center. He holds an M.Sc. from the Stockholm School of Economics.

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