Book contents
- A Great Deal of Ruin
- A Great Deal of Ruin
- Copyright page
- Contents
- Tables
- Preface
- I Introduction
- Part I Financial Crises
- Part II Five Case Studies
- Part III Lessons
- 8 Markets Do Not Self-Regulate
- 9 Shadow Banks are Banks
- 10 Banks Need More Capital, Less Debt
- 11 Monetary Policy Does Not Always Work
- 12 Fiscal Multipliers Are Larger Than Expected
- 13 Monetary Integration Requires Fiscal Integration
- 14 Open Capital Markets Can Be Dangerous
- 15 Not All Debt Is Created Equal
- Conclusion
- Abbreviations and Acronyms
- Bibliography
- Index
9 - Shadow Banks are Banks
from Part III - Lessons
Published online by Cambridge University Press: 05 August 2019
- A Great Deal of Ruin
- A Great Deal of Ruin
- Copyright page
- Contents
- Tables
- Preface
- I Introduction
- Part I Financial Crises
- Part II Five Case Studies
- Part III Lessons
- 8 Markets Do Not Self-Regulate
- 9 Shadow Banks are Banks
- 10 Banks Need More Capital, Less Debt
- 11 Monetary Policy Does Not Always Work
- 12 Fiscal Multipliers Are Larger Than Expected
- 13 Monetary Integration Requires Fiscal Integration
- 14 Open Capital Markets Can Be Dangerous
- 15 Not All Debt Is Created Equal
- Conclusion
- Abbreviations and Acronyms
- Bibliography
- Index
Summary
The financial crisis of 2007–2009 worsened dramatically on September 15, 2008, when Lehman Brothers, the fourth largest investment bank in the United States, collapsed into bankruptcy and triggered the most intense period of financial chaos. The next day, the Federal Reserve provided an $85 billion loan to the insurance giant and financial conglomerate, American International Group (AIG). The Bush Administration immediately went to Congress and asked for $700 billion to buy up bad debt held by banks and other financial institutions. By March of 2009, the stock market had fallen 38 percent, GDP was still shrinking, and people around the world watched in shock as the United States and Western Europe spiraled down into financial chaos.
- Type
- Chapter
- Information
- A Great Deal of RuinFinancial Crises since 1929, pp. 197 - 211Publisher: Cambridge University PressPrint publication year: 2019