Global financial meltdown : what went wrong, what is still going wrong and what the consequences will be

Open Access

Abstract

Current international financial crisis of apparently unprecedented scale (ever since the Great Depression of 1929) could have been spotted from afar and should have been nipped into a bud as early as in 2002! Global political and financial elites are not unable to find the solution to it, they are simply unwilling to identify the problem. The IMF and the BIS once again proved to be useless in their own professional backyard, since it was and still is politically incorrect and financially unremunerative to do so. Crisis has been amplified by sky-rocketing food and oil prices, lax regulation of credit derivatives and cheap-money policy worldwide, but essential culprit of this latest global distress is the greed of the international financial community that spawned fancy asset-backed securitized monsters, which came in too many guises and ultimately got out of hand. Financial mutation brought about jitters of illiquidity across the industry and likely return of depression economics. The paper deals with ill-suited handling of the crisis and probably dire consequences for both the present financial architecture in the economic centres and the future of developing countries at the periphery.