Member-only story

Out of the Crisis Reissue: A New Perspective on the Global Financial Crisis

Everett Bell

·15.2k Followers· Follow

Published in Out Of The Crisis Reissue

4 min read · 2 weeks before

435 View Claps

33 Respond

Save

Listen

The global financial crisis of 2008 was one of the most severe economic crises since the Great Depression. It led to a worldwide recession, the collapse of several major financial institutions, and a loss of trust in the financial system.

In his book Out of the Crisis, Raghuram Rajan, a former chief economist at the International Monetary Fund, provides a detailed analysis of the causes and consequences of the crisis. Rajan argues that the crisis was not simply a failure of regulation, but also a failure of capitalism itself.

The book has been praised for its clarity, insights, and policy recommendations. It has been translated into more than 20 languages and has sold more than 1 million copies worldwide.

Out of the Crisis, reissue

by W. Edwards Deming

4.6 out of 5

Language	:	English
File size	:	4465 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Word Wise	:	Enabled
Print length	:	450 pages

Rajan identifies several factors that contributed to the crisis, including:

Lax lending standards: Banks were making loans to borrowers who could not afford to repay them. This was due in part to the low interest rates that were set by the Federal Reserve in the early 2000s.
Securitization: Banks were bundling mortgages into complex financial instruments called collateralized debt obligations (CDOs). These CDOs were then sold to investors around the world. This created a false sense of security, as investors believed that the CDOs were backed by safe and sound mortgages.
Credit rating agencies: The credit rating agencies gave AAA ratings to many CDOs, even though they were backed by subprime mortgages. This misled investors and contributed to the unsustainable rise in asset prices.
Globalization: The globalization of the financial system allowed the crisis to spread quickly from the United States to other countries.

The crisis had a devastating impact on the global economy. It led to a worldwide recession, the collapse of several major financial institutions, and a loss of trust in the financial system. The crisis also led to a rise in unemployment, poverty, and inequality.

Rajan argues that the crisis was a wake-up call for the world. He believes that we need to reform the financial system to prevent future crises. Rajan's policy recommendations include:

Tighter regulation of banks: Rajan believes that banks should be required to hold more capital and to limit their lending to risky borrowers.
Reform of credit rating agencies: Rajan believes that credit rating agencies should be more accountable for the ratings they give to financial instruments.
International cooperation: Rajan believes that countries need to work together to reform the global financial system.

Out of the Crisis is a must-read for anyone who wants to understand the causes and consequences of the global financial crisis. Rajan's analysis is clear, insightful, and thought-provoking. His policy recommendations are essential reading for policymakers around the world.

Out of the Crisis, reissue

by W. Edwards Deming

4.6 out of 5