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Elgar Encyclopedia of Financial Crises
Beginning with the 2008 global crisis in the United States, and particularly after the COVID-19 pandemic shook economies around the world, academics, practitioners, and other experts have become increasingly sensitised to the potential for financial and economic fragility to result in a systemic breakdown. Presenting a synopsis of lessons learnt from financial crises arising out of the 19th, 20th and 21st centuries, each entry examines a unique past issue to help to develop future outcomes, operating as a touchstone for further research.
More Information
Critical Acclaim
Contributors
Contents
More Information
Beginning with the 2008 global crisis in the United States, and particularly after the COVID-19 pandemic shook economies around the world, academics, practitioners, and other experts have become increasingly sensitised to the potential for financial and economic fragility to result in a systemic breakdown. Presenting a synopsis of lessons learnt from financial crises arising out of the 19th, 20th and 21st centuries, each entry examines a unique past issue to help to develop future outcomes, operating as a touchstone for further research.
This Encyclopedia is vital for those who wish to learn from the past in preparation for economic turbulence ahead. With wide coverage of causes, events and outcomes, it offers an insightful sample of financial crises in various regions and times throughout modern history.
This authoritative work will be incredibly useful for students and scholars of finance management, policy and economics.
Key Features:
● Over 100 entries written by experts in the field
● International scope with entries on financial crises around the world, covering six continents
● A plethora of entries on terms and phenomena to better understand the financial crisis history and literature
This Encyclopedia is vital for those who wish to learn from the past in preparation for economic turbulence ahead. With wide coverage of causes, events and outcomes, it offers an insightful sample of financial crises in various regions and times throughout modern history.
This authoritative work will be incredibly useful for students and scholars of finance management, policy and economics.
Key Features:
● Over 100 entries written by experts in the field
● International scope with entries on financial crises around the world, covering six continents
● A plethora of entries on terms and phenomena to better understand the financial crisis history and literature
Critical Acclaim
‘The literature on financial crises is as rich and dramatic as financial crises themselves. Scholars of the subject – specialists and neophytes alike – are lucky to now have definitive introductions to its various aspects all in one place. We are indebted to Sara Hsu and colleagues for providing this essential reference.’
– Barry Eichengreen, University of California, Berkeley, US
‘The Elgar Encyclopedia of Financial Crises, edited by Professor Sara Hsu is a fascinating “little shop of horrors” of financial mismanagement, poor judgement, and greed gone wild from Finland to the Philippines and just about everywhere in between. Written by knowledgeable scholars from around the globe, this authoritative Encyclopedia should be the “go to” source for students, scholars and policy makers who want to understand the amazing variety of financial follies perpetrated over the decades in places near and far.’
– Gerald Epstein, University of Massachusetts Amherst, US
– Barry Eichengreen, University of California, Berkeley, US
‘The Elgar Encyclopedia of Financial Crises, edited by Professor Sara Hsu is a fascinating “little shop of horrors” of financial mismanagement, poor judgement, and greed gone wild from Finland to the Philippines and just about everywhere in between. Written by knowledgeable scholars from around the globe, this authoritative Encyclopedia should be the “go to” source for students, scholars and policy makers who want to understand the amazing variety of financial follies perpetrated over the decades in places near and far.’
– Gerald Epstein, University of Massachusetts Amherst, US
Contributors
Contributors: Agusman Agusman, Ali Ari, Mohit Arora, James Barth, Charles Bartlett, Viktor Beker, Peter Bent, M. Akif Berber, Concha Betrán Perez, Dabrowski, Marek, Di Quirico, Roberto, Brandon Dupont, Peter C. Earle, Andrés Ernesto Ferrari Haines, Isabelle Gaysset, Animesh Ghoshal, Christopher Godden, Ola Honningdal Grytten, Min Gu, Razali Haron, Carlos Eduardo Hernández, Sara Hsu, Hiromichi Iwaki, Karlo Kauko, Lyubov Klapkiv, Seung Jung Lee, John Lodewijks, Edwin López-Rivera, Gabriel X. Martinez, Rita Martins de Sousa, Martina Metzger, Stephen Matteo Miller, Juan Carlos Moreno Brid, Simon Neaime, Hernán Eduardo Neyra, Naji Mansour Nomran, Juan Manuel Padín, Carlo Panico, Phyllis Papadavid, Roberto Accioly Perrelli, Maria A. Pons, William Rapp, Ian Roberge, Manuel Duarte Rocha, Joaquiìn Saìnchez Goìmez, Harald Sander, Rafael Felipe Schiozer, Aurel Schubert, Simone Selva, Andrew Sheng, Yanfei Sun, Dirk Willem te Velde, Paolo Terra, Faruk Ülgen, Nicolas Varela Garcia, Gertjan Verdickt, Brenda Visano, Tiia Vissak, Cameron Weber, Ensar Yılmaz
Contents
Contents:
Preface xii
1 2002 Uruguay banking crisis 1
Simone Selva
2 2008 Financial Crisis in the US 7
Sara Hsu and Brandon Dupont
3 A Classical-Keynesian
approach to financial crises 11
Carlo Panico
4 A financial crisis as
a form of VUCA (volatile,
uncertain, complex, and
ambiguous situation) 17
Tiia Vissak
5 A modern Greek tragedy:
the crises of 2009–2015 21
Animesh Ghoshal
6 Argentina’s 1989 crisis 26
Hernán Eduardo Neyra and
Andrés Ernesto Ferrari Haines
7 Asian financial crisis 31
Andrew Sheng
8 Assessing reserve
management during
economic crises: lessons
from Indonesia and Nigeria 35
Phyllis Papadavid
9 Austrian School monetary
explanation for the business cycle 43
Cameron M. Weber
10 Bank and corporate
balance sheet
vulnerabilities and currency crises 48
Manuel Duarte Rocha and
Roberto Accioly Perrelli
11 Belgium’s crises in the
pre-World War I era 51
Gertjan Verdickt
12 Bolivia—debt
accumulation in the 1970s,
hyperinflation in the 1980s 54
Gabriel Martinez
13 Canada and the global
financial crisis 58
Ian Roberge
14 Canada’s asset-backed
commercial paper crisis 62
Ian Roberge
15 Central banks 65
Nicolás Varela García
16 Changes in commodity
prices as the factor
triggering financial crises 70
Marek Dabrowski
17 Chile: the 1973 economic
crisis and the military coup 76
Juan M. Padín
18 Chile’s 1981–83 crisis 78
Gabriel Martinez
19 Colombia during the
financial crisis of the 1980s 84
Carlos Eduardo Hernández and
Edwin López-Rivera
20 Colombia during the
financial crisis of the late 1990s 88
Carlos Eduardo Hernández and
Edwin López-Rivera
21 Colombia during the Great
Depression 92
Carlos Eduardo Hernández and
Edwin López-Rivera
22 Crisis prevention and resolution 95
Sara Hsu
23 Definition of banking crisis 98
Ali Ari
24 Determinants of banking crises 101
Ali Ari
25 Discovering business
opportunities emerging
from financial crises 105
Tiia Vissak
26 Early warning systems
(EWS) of currency crises 108
Manuel Duarte Rocha and
Roberto Accioly Perrelli
27 Ecuador’s 1999 triple
financial crisis 111
Gabriel Martinez
28 Egypt’s currency and
financial crisis 118
Simon Neaime and Isabelle Gaysset
29 Factors determining public
debt sustainability 121
Marek Dabrowski
30 Financial crises and
financial regulation: what
relationship? 127
Lyubov Klapkiv and Faruk Ülgen
31 Financial crises in Spain
after Bretton Woods: 1977
and 2008 crises 136
Concha Betrán and María A. Pons
32 Financial crises in the
Ottoman Empire 141
Akif Berber
33 Financial crises in Turkey 146
Ali Ari
34 Financial crises, their
forms, interrelations
between them, and crises’ origins 151
Marek Dabrowski
35 Financial liberalization,
the capital surge, and the
1994–1995 peso crisis 155
Juan Carlos Moreno-Brid and
Joaquín Sánchez Gómez
36 Financial stability in
the insurance sector: the
case of the American
International Group, AIG 157
Lyubov Klapkiv and Faruk Ülgen
37 Firms’ ways to deal with
financial crises 162
Tiia Vissak
38 Fiscal policy and financial
instability 165
John Lodewijks
39 Global capital flows and
financial instability 168
John Lodewijks
40 Global imbalances and
global recession 171
Ensar Yõlmaz
41 Global pandemic and
stock market volatility of
Asia-Pacific countries 176
Naji Mansour Nomran and
Razali Haron
42 Great crises of the
twentieth and twenty-first
centuries: a Schumpeterian
perspective 181
Faruk Ülgen and Lyubov Klapkiv
43 Hyman Minsky (1919–1996) 189
Brenda Spotton Visano
44 IMF and World Bank
remedies for financial instability 191
John Lodewijks
45 Income inequality before
the Great Depression and
Global Recession 194
Ensar Yõlmaz
46 India’s balance of payments crises 199
Animesh Ghoshal
47 Inequality created by
active monetary policy 204
Cameron M. Weber
48 Inflation 209
Nicolás Varela García
49 International banking regulation 214
Martina Metzger
50 Italy and the 1992 crisis of
the European Monetary System 219
Roberto Di Quirico
51 Italy and the Eurozone crisis 222
Roberto Di Quirico
52 John Maynard Keynes
(1883–1946) 226
Brenda Spotton Visano
53 Joseph Alois Schumpeter
(1883–1950) 230
Brenda Spotton Visano
54 Lebanon’s perfect storm 232
Simon Neaime and Isabelle Gaysset
55 Liability dollarization 236
Gabriel Martinez
56 London and the
exchange-rate crisis of 1931 240
Christopher Godden
57 London and the financial
crisis of 1914 244
Christopher Godden
Malaysian crisis 1985 248
Simone Selva
59 Marxian crisis theory 251
Deb Das
60 Monetary policy and
financial stability in Africa
during COVID-19 253
Phyllis Papadavid and Dirk
Willem te Velde
61 Panic of 1857 256
William V. Rapp
62 Panic of 1907 260
William V. Rapp
63 Philippines banking crisis of 1981 264
Simone Selva
64 Portuguese banking crisis of 1876 267
Rita Martins de Sousa
65 Portuguese financial crisis
of 1890/91 270
Rita Martins de Sousa
66 Recoveries from financial crises 275
Peter H. Bent
67 Southeast Asian crisis from
a currency perspective 280
Martina Metzger
68 Spain’s crises in the
interwar period: the Great
Depression 284
Concha Betrán and María A. Pons
69 Spain’s crises in the
second half of the
nineteenth century (gold
standard system) 289
Concha Betrán and María A. Pons
70 Systemic risk and credit risk 294
Victor A. Beker
71 Thailand 1997: the spark
that started the fire 296
Gabriel Martinez
72 The 1893 bank crisis 303
Brandon Dupont
73 The 1931 banking crisis in Italy 307
Roberto Di Quirico
74 The 1935 Italian currency crisis 311
Roberto Di Quirico
75 The 1967 Indonesian
banking crisis 314
Agusman Agusman
76 The 1997–1998 Korean
financial crisis 317
Seung Jung Lee
77 The 1997–1998 financial
crisis in Japan 320
Hiromichi Iwaki
78 The 1997/1998 Indonesian
banking crisis 326
Agusman Agusman
79 The 1998 Russian debt crisis 330
Peter C. Earle
80 The 2001 Argentina financial crisis 332
Hernán Eduardo Neyra and
Andrés Ernesto Ferrari Haines
81 The 2007 financial crisis in
the United Kingdom 340
Seung Jung Lee
82 The 2008–2009
international financial
crisis: influenza or minor
cold in Mexico? 343
Juan Carlos Moreno-Brid and
Joaquín Sánchez Gómez
83 The 2008/2009 financial
crisis in Brazil 346
Rafael F. Schiozer and Paulo R.
S. Terra
84 The Argentinean financial
and debt crisis of 2019 351
Juan Santarcángelo
85 The banking crisis in
Norway 1987–1993 354
Ola Honningdal Grytten
86 The Brazilian banking
crisis of 1994/95 360
Rafael F. Schiozer and Paulo R.
S. Terra
87 The Brazilian currency
crisis of 1999 363
Rafael F. Schiozer and Paulo R.
S. Terra
88 The Covid-19 crisis in
Mexico (2020 …) 368
Juan Carlo Moreno-Brid and
Joaquín Sánchez Gómez
89 The Credit-Anstalt crisis of 1931 372
Aurel Schubert
90 The debt crisis in Latin
America in the 1980s 376
Juan Santarcángelo
91 The developing country
debt crisis of the 1980s 379
Harald Sander
92 The Euro Crisis 383
Harald Sander
93 The financial crisis in
Japan in the 1920s 389
Hiromichi Iwaki
94 The Finnish banking crisis
of the 1930s 394
Karlo Kauko
95 The Finnish banking crisis
of the 1990s 397
Karlo Kauko
96 The Great Depression in Norway 402
Ola Honningdal Grytten
97 The Great Depression in
the United States 406
Charles Bartlett
98 The Icelandic banking
crisis of 2008 413
Karlo Kauko
99 The impacts of financial
crises on firms’ exports 417
Tiia Vissak
100 The Irish financial crisis of
2007–2010 420
Aurel Schubert
101 The lost decade and the
1982 debt crisis in Mexico 424
Juan Carlos Moreno-Brid and
Joaquín Sánchez Gómez
102 The Norwegian monetary
crisis in the mid-1920s 426
Ola Honningdal Grytten
103 The “odious” route to
a sovereign debt crisis in
the Democratic Republic of Congo 431
Mohit Arora
104 The period of the 1930s in
the Portuguese economy 436
Rita Martins de Sousa
105 The post-war depression in
Norway in the early 1920s 440
Ola Honningdal Grytten
106 The special period in Cuba 444
Peter C. Earle
107 The US savings and loan crisis 446
James R. Barth, Yanfei Sun and
Min Gu
108 Tobin Tax and capital controls 452
John Lodewijks
109 Too big to fail 455
Victor A. Beker
110 Tulip mania 1637 and
other crises in the Netherlands 458
Simone Selva
111 US financial crises and
growing federal oversight
of banking 463
James R. Barth and Stephen
Matteo Miller
Index 473
Preface xii
1 2002 Uruguay banking crisis 1
Simone Selva
2 2008 Financial Crisis in the US 7
Sara Hsu and Brandon Dupont
3 A Classical-Keynesian
approach to financial crises 11
Carlo Panico
4 A financial crisis as
a form of VUCA (volatile,
uncertain, complex, and
ambiguous situation) 17
Tiia Vissak
5 A modern Greek tragedy:
the crises of 2009–2015 21
Animesh Ghoshal
6 Argentina’s 1989 crisis 26
Hernán Eduardo Neyra and
Andrés Ernesto Ferrari Haines
7 Asian financial crisis 31
Andrew Sheng
8 Assessing reserve
management during
economic crises: lessons
from Indonesia and Nigeria 35
Phyllis Papadavid
9 Austrian School monetary
explanation for the business cycle 43
Cameron M. Weber
10 Bank and corporate
balance sheet
vulnerabilities and currency crises 48
Manuel Duarte Rocha and
Roberto Accioly Perrelli
11 Belgium’s crises in the
pre-World War I era 51
Gertjan Verdickt
12 Bolivia—debt
accumulation in the 1970s,
hyperinflation in the 1980s 54
Gabriel Martinez
13 Canada and the global
financial crisis 58
Ian Roberge
14 Canada’s asset-backed
commercial paper crisis 62
Ian Roberge
15 Central banks 65
Nicolás Varela García
16 Changes in commodity
prices as the factor
triggering financial crises 70
Marek Dabrowski
17 Chile: the 1973 economic
crisis and the military coup 76
Juan M. Padín
18 Chile’s 1981–83 crisis 78
Gabriel Martinez
19 Colombia during the
financial crisis of the 1980s 84
Carlos Eduardo Hernández and
Edwin López-Rivera
20 Colombia during the
financial crisis of the late 1990s 88
Carlos Eduardo Hernández and
Edwin López-Rivera
21 Colombia during the Great
Depression 92
Carlos Eduardo Hernández and
Edwin López-Rivera
22 Crisis prevention and resolution 95
Sara Hsu
23 Definition of banking crisis 98
Ali Ari
24 Determinants of banking crises 101
Ali Ari
25 Discovering business
opportunities emerging
from financial crises 105
Tiia Vissak
26 Early warning systems
(EWS) of currency crises 108
Manuel Duarte Rocha and
Roberto Accioly Perrelli
27 Ecuador’s 1999 triple
financial crisis 111
Gabriel Martinez
28 Egypt’s currency and
financial crisis 118
Simon Neaime and Isabelle Gaysset
29 Factors determining public
debt sustainability 121
Marek Dabrowski
30 Financial crises and
financial regulation: what
relationship? 127
Lyubov Klapkiv and Faruk Ülgen
31 Financial crises in Spain
after Bretton Woods: 1977
and 2008 crises 136
Concha Betrán and María A. Pons
32 Financial crises in the
Ottoman Empire 141
Akif Berber
33 Financial crises in Turkey 146
Ali Ari
34 Financial crises, their
forms, interrelations
between them, and crises’ origins 151
Marek Dabrowski
35 Financial liberalization,
the capital surge, and the
1994–1995 peso crisis 155
Juan Carlos Moreno-Brid and
Joaquín Sánchez Gómez
36 Financial stability in
the insurance sector: the
case of the American
International Group, AIG 157
Lyubov Klapkiv and Faruk Ülgen
37 Firms’ ways to deal with
financial crises 162
Tiia Vissak
38 Fiscal policy and financial
instability 165
John Lodewijks
39 Global capital flows and
financial instability 168
John Lodewijks
40 Global imbalances and
global recession 171
Ensar Yõlmaz
41 Global pandemic and
stock market volatility of
Asia-Pacific countries 176
Naji Mansour Nomran and
Razali Haron
42 Great crises of the
twentieth and twenty-first
centuries: a Schumpeterian
perspective 181
Faruk Ülgen and Lyubov Klapkiv
43 Hyman Minsky (1919–1996) 189
Brenda Spotton Visano
44 IMF and World Bank
remedies for financial instability 191
John Lodewijks
45 Income inequality before
the Great Depression and
Global Recession 194
Ensar Yõlmaz
46 India’s balance of payments crises 199
Animesh Ghoshal
47 Inequality created by
active monetary policy 204
Cameron M. Weber
48 Inflation 209
Nicolás Varela García
49 International banking regulation 214
Martina Metzger
50 Italy and the 1992 crisis of
the European Monetary System 219
Roberto Di Quirico
51 Italy and the Eurozone crisis 222
Roberto Di Quirico
52 John Maynard Keynes
(1883–1946) 226
Brenda Spotton Visano
53 Joseph Alois Schumpeter
(1883–1950) 230
Brenda Spotton Visano
54 Lebanon’s perfect storm 232
Simon Neaime and Isabelle Gaysset
55 Liability dollarization 236
Gabriel Martinez
56 London and the
exchange-rate crisis of 1931 240
Christopher Godden
57 London and the financial
crisis of 1914 244
Christopher Godden
Malaysian crisis 1985 248
Simone Selva
59 Marxian crisis theory 251
Deb Das
60 Monetary policy and
financial stability in Africa
during COVID-19 253
Phyllis Papadavid and Dirk
Willem te Velde
61 Panic of 1857 256
William V. Rapp
62 Panic of 1907 260
William V. Rapp
63 Philippines banking crisis of 1981 264
Simone Selva
64 Portuguese banking crisis of 1876 267
Rita Martins de Sousa
65 Portuguese financial crisis
of 1890/91 270
Rita Martins de Sousa
66 Recoveries from financial crises 275
Peter H. Bent
67 Southeast Asian crisis from
a currency perspective 280
Martina Metzger
68 Spain’s crises in the
interwar period: the Great
Depression 284
Concha Betrán and María A. Pons
69 Spain’s crises in the
second half of the
nineteenth century (gold
standard system) 289
Concha Betrán and María A. Pons
70 Systemic risk and credit risk 294
Victor A. Beker
71 Thailand 1997: the spark
that started the fire 296
Gabriel Martinez
72 The 1893 bank crisis 303
Brandon Dupont
73 The 1931 banking crisis in Italy 307
Roberto Di Quirico
74 The 1935 Italian currency crisis 311
Roberto Di Quirico
75 The 1967 Indonesian
banking crisis 314
Agusman Agusman
76 The 1997–1998 Korean
financial crisis 317
Seung Jung Lee
77 The 1997–1998 financial
crisis in Japan 320
Hiromichi Iwaki
78 The 1997/1998 Indonesian
banking crisis 326
Agusman Agusman
79 The 1998 Russian debt crisis 330
Peter C. Earle
80 The 2001 Argentina financial crisis 332
Hernán Eduardo Neyra and
Andrés Ernesto Ferrari Haines
81 The 2007 financial crisis in
the United Kingdom 340
Seung Jung Lee
82 The 2008–2009
international financial
crisis: influenza or minor
cold in Mexico? 343
Juan Carlos Moreno-Brid and
Joaquín Sánchez Gómez
83 The 2008/2009 financial
crisis in Brazil 346
Rafael F. Schiozer and Paulo R.
S. Terra
84 The Argentinean financial
and debt crisis of 2019 351
Juan Santarcángelo
85 The banking crisis in
Norway 1987–1993 354
Ola Honningdal Grytten
86 The Brazilian banking
crisis of 1994/95 360
Rafael F. Schiozer and Paulo R.
S. Terra
87 The Brazilian currency
crisis of 1999 363
Rafael F. Schiozer and Paulo R.
S. Terra
88 The Covid-19 crisis in
Mexico (2020 …) 368
Juan Carlo Moreno-Brid and
Joaquín Sánchez Gómez
89 The Credit-Anstalt crisis of 1931 372
Aurel Schubert
90 The debt crisis in Latin
America in the 1980s 376
Juan Santarcángelo
91 The developing country
debt crisis of the 1980s 379
Harald Sander
92 The Euro Crisis 383
Harald Sander
93 The financial crisis in
Japan in the 1920s 389
Hiromichi Iwaki
94 The Finnish banking crisis
of the 1930s 394
Karlo Kauko
95 The Finnish banking crisis
of the 1990s 397
Karlo Kauko
96 The Great Depression in Norway 402
Ola Honningdal Grytten
97 The Great Depression in
the United States 406
Charles Bartlett
98 The Icelandic banking
crisis of 2008 413
Karlo Kauko
99 The impacts of financial
crises on firms’ exports 417
Tiia Vissak
100 The Irish financial crisis of
2007–2010 420
Aurel Schubert
101 The lost decade and the
1982 debt crisis in Mexico 424
Juan Carlos Moreno-Brid and
Joaquín Sánchez Gómez
102 The Norwegian monetary
crisis in the mid-1920s 426
Ola Honningdal Grytten
103 The “odious” route to
a sovereign debt crisis in
the Democratic Republic of Congo 431
Mohit Arora
104 The period of the 1930s in
the Portuguese economy 436
Rita Martins de Sousa
105 The post-war depression in
Norway in the early 1920s 440
Ola Honningdal Grytten
106 The special period in Cuba 444
Peter C. Earle
107 The US savings and loan crisis 446
James R. Barth, Yanfei Sun and
Min Gu
108 Tobin Tax and capital controls 452
John Lodewijks
109 Too big to fail 455
Victor A. Beker
110 Tulip mania 1637 and
other crises in the Netherlands 458
Simone Selva
111 US financial crises and
growing federal oversight
of banking 463
James R. Barth and Stephen
Matteo Miller
Index 473
