Financial Crises

Primary Sources

Federal Reserve Chair Semiannual Monetary Policy Report to the Congress

These semiannual reports and testimony are required by the Federal Reserve Act and are submitted to the Senate Committee on Banking, Housing, and Urban Affairs and to the House Committee on Financial Services. The Monetary Policy report and related testimony are the Federal Reserve's analysis of "the conduct of monetary policy and economic developments and prospects for the future."

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Must Read

Project Syndicate: An Agenda to Save the Euro

Author: Joseph E. Stiglitz

"If the eurozone adopts the program outlined above, there should be no need for Germany to pick up any tab. But under the perverse policies that Europe has adopted, one debt restructuring has been followed by another. If Germany and the other northern European countries continue to insist on pursuing current policies, they, together with their southern neighbors, will wind up paying a high price."

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Foreign Affairs Article

Never Saw It Coming

Author: Alan Greenspan

The former chair of the U.S. Federal Reserve asks how so many experts, including him, failed to see the 2008 financial crisis approaching. An important part of the answer to that question is a very old idea: Keynesian "animal spirits," the irrational elements of decisionmaking that have been left out of economic forecasting for too long.

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New York Times: Treasure Hunters of the Financial Crisis

Author: Peter Lattman

"Much attention has been lavished on the speculators who reaped huge paydays betting against the subprime mortgages that stoked the financial crisis. Doomsayers like the hedge fund manager John Paulson and the cast of characters in "The Big Short," the Michael Lewis book, saw calamity coming, and their contrarian bets delivered when the housing market collapsed.

But what about the big long? During the dark days of late 2008, while other investors dumped their holdings or sat paralyzed on the sidelines, who decided that it was time to put money on the line? Who bought low and then sold high?"

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Financial Times: Optimism About an End to the Euro Crisis Is Wrong

Author: Wolfgang Münchau

"In a monetary union, adjustment is hard without any transfers and without a fiscal union. I know of no plausible plan how the eurozone can manage the dual feat of economic adjustment and debt sustainability within the straitjacket of official policy. And as long as such a plan does not exist, the crisis is not over."

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Project Syndicate: The Eurozone’s Calm Before the Storm

Author: Nouriel Roubini

"So far, the grand bargain between the core and the periphery has held up: the periphery continues austerity and reform while the core remains patient and provides financing. But the eurozone's political strains may soon reach a breaking point, with populist anti-austerity parties in the periphery and populist anti-euro and anti-bailout parties in the core possibly gaining the upper hand in next year's European Parliament elections."

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Transcript

HBO History Makers: Understanding the 2008 Financial Crisis

Speakers: Barney Frank and Henry M. Paulson, Jr.
Presider: David Wessel

Barney Frank and Henry M. Paulson Jr. look back at the 2008 financial crisis, the ongoing recovery process, and lessons learned from their unique perspectives.

In collaboration with the Council on Foreign Relations, the Home Box Office History Makers Series sponsors speakers whose contributions made a prominent impact at a critical juncture in history.

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Interview

Gulf Cash Stabilizes Egypt, for Now

Farouk Soussa interviewed by Mohammed Aly Sergie

As Egypt's political crisis deepens, its economy has been stabilized by a cash infusion from the oil-rich Persian Gulf. Economist Farouk Soussa outlines the limited options facing Egypt's interim government.

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Op-Ed

Bernanke Is Calibrating the Markets Into Fits

Authors: Benn Steil and Dinah Walker
Financial News

Benn Steil and Dinah Walker explain the market massacre following Ben Bernanke's press conference on June 19. Bernanke's repeated statements that a key tool of current Fed policy, asset purchases, would be "calibrated" to employment data, each month's publication of which can imply a major shift in the unemployment trend line, suggests that Fed tightening could begin as early as the middle of next year—nearly a year and half earlier than the Fed had suggested in its pledge statement last fall.

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Foreign Affairs Article

The Second Great Depression

Author: Bradford DeLong

The global economic downturn is hardly over, and without a more dramatic set of actions, the United States is likely to suffer another major crisis in the years ahead. A new book by Alan Blinder may be the best general volume on the recession to date, but it paints an overly optimistic portrait of the current situation.

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How Austerity Has Failed

Author: Martin Wolf

"Austerity has failed. It turned a nascent recovery into stagnation. That imposes huge and unnecessary costs, not just in the short run, but also in the long term: the costs of investments unmade, of businesses not started, of skills atrophied, and of hopes destroyed."

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