AN INVESTIGATION OF THE FACTORS CAUSING FINANCIAL CRISIS: LESSONS FROM RECENT OVERWHELMING EPISODES
AN INVESTIGATION OF THE FACTORS CAUSING FINANCIAL CRISIS: LESSONS FROM RECENT OVERWHELMING EPISODES

Summary/Abstract: Financial crisis has an enormous effect on economic growth as it reduces the efficiency of financial system to transfer funds through proper channels and thereby causes economic downturn. The paper examines the factors causing financial crisis for understanding how its build up looks like before we get into it, to take necessary measures in advance, in manner to avoid the financial crisis or, at least, to abate its consequences that a single country or entire world might follow. Major factors that are contributing to financial meltdown are: stock market crash, bank panic, housing bubble, financial liberalization, just to name a few of them. This paper is based on available literature on major financial crisis episodes of the late twentieth and early twenty-first centuries, to identify factors causing such great economic events.

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