When rules and principles are not enough: insiders’ views and narratives on the global financial crisis

Much has been written about Wall Street and the global financial crisis (GFC). From a fraudulent derivatives market to a contestable culture of banking bonuses, culpability has been examined within the frames of American praxis, namely that of American exceptionalism. This study begins with an exploratory analysis of non-US voices concerning the nature of the causes of the GFC. The analysis provides glimpses of the globalized extent of assumptions shared, but not debated within the globalization convergence of financial markets as the neo-liberal project. Practical and paradigmatic tensions are revealed in the capture of a London-based set of views articulated by senior financial executives of financial service organizations, the outcomes of which are not overly optimistic for any significant change in praxis within the immediate future.

Leader characteristics and styles in the SMEs of the People's Republic of China during the global financial crisis

This empirical study explores successful views and characteristics of leaders and employees in the SMEs of the People's Republic of China during the global financial crisis.

Global financial crisis: implications for Chinese corporate governance

This paper analyses the role of corporate governance failures and weaknesses in the global financial crisis with reference to the evolution of post-crisis corporate governance arrangements in China. The current crisis presents China with an opportunity to analyse its governance problems, reflect on its weaknesses and implement a strategy to address areas which need attention. This paper opens with a description of China’s exposure to the current global financial crisis and continues to critically evaluate the effectiveness of a free market system on corporate governance. Bratton (2002) maintains that incentive structures that motivate the self-regulatory systems generate less powerful checks against abuse than scholars and practitioners have believed. The paper highlights the need for corporate regulatory bodies and policy makers to revise and re-develop financial services sector regulations. Finally, the paper discusses the need of ethics in organizations - an issue that is beyond legislation. In an increasingly interconnected global economy, it is imperative to increase our understanding of what constitutes an effective corporate governance system. The paper contributes to the corporate governance body of literature within the Chinese context by providing insights into the contributing factors to corporate governance failure that led to the global financial crisis. It also provides policy recommendations for China’s policy makers to seriously consider. The results suggest a need for the re-examination of corporate governance adequacy and the institutionalisation of business ethics.

Uptake of agri-environmental schemes in the Less-Favoured Areas of Greece: The role of corruption and farmers' responses to the financial crisis

Vine-growing in the Less-Favoured Areas of Greece is facing multiple challenges that might lead to its abandonment. In an attempt to maintain rural populations, Rural Development Schemes have been created that offer the opportunity to rural households to maintain or expand their farming businesses including vine-growing. This paper stems from a study that used data from a cross-sectional survey of 204 farmers to investigate how farming systems and farmers’ perception of corruption, amongst other socio-economic factors, affected their decisions to continue vine-growing through participation in Rural Development Schemes, in three remote Less-Favoured Areas of Greece. The Theory of Planned Behaviour was used to frame the research problem with the assumption being that an individual’s intention to participate in a Scheme is based on their prior beliefs about it. Data from the survey were reduced and simplified by the use of non-linear principal component analysis. The ensuing variables were used in selectivity corrected ordered probit models to reveal farmers’ attitudes towards viticulture and rural development. It was found that economic factors, perceived corruption and farmers’ attitudes were significant determinants on whether to participate in the Schemes. The research findings highlight the important role of perceived corruption and the need for policies that facilitate farmers’ access to decision making centres.

Economic growth in Sweden, 2000-2010 : The dot-com bubble and the financial crisis

    Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. The total output is the quantity of goods or servicesproduced in a given time period within a country. Sweden was affected by two crises during the period 2000-2010: a dot-com bubble and a financial crisis. How did these two crises affect the economic growth?     The changes of domestic output can be separated into four parts: changes in intermediate demand, final domestic demand, export demand and import substitution. The main purpose of this article is to analyze the economic growth during the period 2000-2010, with focus on the dot-com bubble in the beginning of the period 2000-2005, and the financial crisis at the end of the period 2005-2010. The methodology to be used is the structural decomposition method.     This investigation shows that the main contributions to the Swedish total domestic output increase in both the period 2000-2005 and the period 2005-2010 were the effect of domestic demand. In the period 2005-2010, financial crisis weakened the effect of export. The output of the primary sector went from a negative change into a positive, explained mainly by strong export expansion. In the secondary sector, export had most effect in the period 2000-2005. Nevertheless, domestic demand and import ratio had more effect during the financial crisis period. Lastly, in the tertiary sector, domestic demand can mainly explain the output growth in the whole period 2000-2010.

Does Regulation matter? Institutional dimension of the 2008 financial crisis

Why did house prices fall in 2007‐2009? This is the fundamental question to most Americans, and to those who lent them money. Most homeowners did not care why residential real estate prices rose. They assumed prices always rose, and they should simply enjoy their good fortune. It was not until prices began to fall that people were left searching for answers. How much did regulation or lack thereof play in the role of the devastation? To what degree did greed and unrealistic consumer expectation have on the real estate bubble? Using existing literature as well as face to face interviews of experienced leaders within the real estate industry in California who experienced both the up and down of the real estate cycle, the overarching purpose of this study is to investigate the opinions and beliefs of the leaders and drivers within the real estate industry about the cause of the real estate bubble that occurred sharply in 2008 . Specifically, this project will focus on the opinions of real estate industry leaders who worked in the center of the subprime universe located in Irvine, California, during 2004‐2008. Comparing the mainstream beliefs with the interviewees it is fair to say that the main finding in the mainstream beliefs are reflected very well with the finding of the subject’s opinion. The thesis is divided into 6 chapters starting with “introduction”, followed by chapter 2 “Literature Review”. Chapter 3 is “Research Methodology” followed by chapter 4 “Data Presentation”. Finally, the results are discussed in chapter 5 “Analysis and Discussion” and conclusions in Chapter 6.

Value and momentum strategies in the Brazilian stock market: the 2008 financial crisis and its aftermath

Esta dissertação analisa o desempenho de três estratégias de investimento em carteiras de custo zero (“value”, “momentum” e uma combinação 50/50 delas, que é chamada de “combo”) no mercado de ações brasileiro durante a última década. Os resultados são comparados aos encontrados por Asness, Moskowitz e Pedersen (2009) para quatro mercados: EUA, Reino Unido, Europa Continental, e Japão. Uma análise específica é feita em torno da crise financeira de 2008, comparando os resultados pré- e pós-crise. O índice de Sharpe é usado para ajustar os desempenhos por seus riscos, e para classificar as estratégias para diferentes horizontes de investimento. Os resultados mostram um ótimo desempenho da estratégia “combo” nos últimos três anos, período que inclui a crise de 2008, mas considerando todo o período analisado a estratégia “value” obteve o melhor desempenho. Esse resultado difere dos resultados encontrados para os quatro mercados de referência, onde a estratégia combo tem o melhor desempenho. A análise do horizonte de investimento mostra que a escolha do investidor pode mudar com diferentes horizontes.

A cross-country study on trade credit supply and financial crisis

O objetivo deste trabalho de pesquisa é investigar a oferta de crédito comercial durante períodos de crise financeira em seis países diferentes: Brasil, França, Alemanha, Itália, Espanha e Reino Unido, foram utilizadas informações de empresas de capital aberto entre 2000 e 2011. A literatura internacional documenta que durante o pico de crises financeiras a oferta de crédito comercial aumenta pois as companhias usam o crédito comercial como substituto e/ou complemento ao crédito bancário, apesar de após o momento de pico esta oferta diminui significantemente porque as empresas enfrentam problemas de liquidez causado por escassez de crédito. Mesmo que somente existam evidências pontuais de que a oferta de crédito comercial aumentou durante a crise financeira global de 2008, o efeito pós-crise é perceptível durante a crise Europeia de 2011, pois as empresas europeias diminuíram a oferta de crédito comercial, também evidenciando que estas companhias estavam confrontando problemas de administração de liquidez. Em relação ao uso de crédito comercial como ferramenta de transmissão de capital, nenhuma evidência foi encontrada para provar sua existência em tempo de crise financeira.

Performance contrasts during the financial crisis between publicly traded family and non-family firms in Europe

Neste estudo, analiso o desempenho de empresas familiares e não-familiares na Europa, entre 2001 e 2013, com uma especial atenção ao período da crise financeira de 2008 e 2009. Doze anos de dados foram recolhidos e analisadosusando dois modelos: o modelo de ajustamento do mercado e uma técnica de estimativa de painéis. Ao contrário das expectativas, os resultados mostram que as empresas familiares não têm resultados significativamente superiores às empresas não familiares durante o período em análise, inclusive antes, durante, e depois da crise. No entanto, considerando o valor do beta, existem diferenças significativas. É possível concluir que as empresas familiares são, em geral, menos voláteis e que durante a crise apresentaram uma volatilidade extremamente baixa comparativamente com o mercado.JEL

Financial governance: the Brazilian experience on prudential regulation and its impacts on the effects of the 2008 financial crisis

The Brazilian economy was severely hit by the 2008 crisis. In the beginning of the crisis, the vast majorities of the economic agents and authorities thought that Brazil could face some sort of decoupling since some macroeconomic fundamentals were very good. What we saw, however, was that the Brazilian economy was not decoupled, and expectations faced a huge deterioration soon after the bankruptcy of Lehman Brothers in September 15th. Two aspects regarding the impact of crisis in Brazil, however, deserve a great deal of attention: (a) although deep, the impact did not last for a long time. Actually, the GDP growth experienced a good recovery in the second quarter of 2009, showing that the health of the Brazilian economy was good; (b) the Brazilian banking system performed very well during the crisis, although we cannot say the system was not in danger in the worst time of the crisis. In spite of the confidence crisis faced by the banking system 1, it showed a great deal of resilience. In this aspect, we argue that the restructure faced by the banking system in the aftermath of the Real Plan, as well as the development of a solid supervision regulation helped a lot the system to avoid the systemic crisis that was an open possibility to the Brazilian banking system in the end of 2008. These notes, thus, discusse why the Brazilian banking system performed pretty well in the 2008 financial crisis and how the Brazilian banking (and prudential) regulation can be taken as responsible for this good performance. More specifically, the paper back to the middle of the 1990s, when the Real Plan was implemented, in order to understand the role played by the restructuring of the Brazilian financial system in helping to pave the way to the great resilience experienced by the Brazilian banking system during the 2008 crisis. More specifically, the prudential regulation that was implemented in Brazil in the aftermath of the Real Plan seems to play a decisive role in the resilience of the system nowadays.

A note on financial regulation and the brazilian response to the 2008‐09 financial crisis

Brazil was frequently criticized for its interventionist and heavy financial regulation up until the 2008‐09 world financial crisis.  According to the neo‐liberal or pro‐market view that predominated in academic and financial circles during the early 2000s, economic development came together with financial deepening, which in its turn could only be achieved through financial liberalization and deregulation. The currency crises of the 1990s notwithstanding, by the mid‐2000s Brazil’s segmented financial market and its restrictive reserve and capital requirements were seen as a symbol of inefficiency and backwardness by most financial specialists.  To the luck of the Brazilian population, most of the advices of such specialists were ignored by the Brazilian authorities, so that, when the 2008 financial crisis hit the world economy, Brazil still had powerful and efficient instruments to deal with the problem.  The objective of this note is to present the mains aspects of the Brazilian financial regulation and how they helped the economy to deal with the consequences of 2008‐09 financial meltdown.