Recurring Crises in Anglo-American Corporate Governance
Year: 2010
Type: article
Abstract: The prolonged systemic crisis in international financial markets commencing in 2007 was also a crisis in corporate governance and regulation. The apparent ascendancy of Anglo-American markets and governance institutions was profoundly questioned by the scale and contagion of the global financial crisis. Instead of risk being hedged, it had become inter-connected, international, and unknown. The market capitalisation of the stock markets of the world had peaked at $62 trillion at the end of 2007. By October 2008 they were in free fall, having lost $33 trillion, over half of their value, in 12 months of unrelenting financial and corporate failures. A debate has continued for some time about the costs and benefits of the financialisation of advanced industrial economies. The long progression of financial crises around the world served as a reminder that the system is neither self-regulating, nor robust. The explanation of why investment banks and other financial institutions took such spectacular risks with extremely leveraged positions on many securities and derivatives, and the risk management, governance, and ethical environment that allowed such conduct to take place demands detailed analysis.
DOI: 10.1093/cpe/bzq002
Author: T. Clarke
Institution: University of Technology Sydney
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2160999167