Both international trade and investment by East Asian countries have become significantly regionalized. To support this development further, efforts for regional integration have flourished in the forms of bilateral and regional free trade agreements and the ASEAN+3 and East Asia Summit processes, among many others. This book is a compilation of papers and discussions originally presented at the international symposium held during the recent global financial crisis. The symposium aimed to shed light not only on the usual economic aspect but also on other aspects of the multidimensional phenomenon called "regional integration". Thus, in this volume the authors explore the relationship between the U.S. influence and East Asian regionalism, the characteristics of East Asian integration, and the politics of inclusion/exclusion in the integration process. In addition, they point out some "missing links" in integration efforts such as cooperation in the areas of logistics, finance, trade in services, infrastructure and human resource movement. Since the global financial crisis did not deter integration efforts (rather, it has encouraged them), this book serves as a guide for future East Asian integration in terms of what to expect and what is to be done
The aim of this paper is to find a dynamic framework of analysis of credit union movements by grouping credit unions into different category types. Within the heterogeneous reality of the worldwide credit union movement, the typology provides a clearer understanding of the dynamics of change and development. We use panel-ordered logistic regression to find the key covariates of influence when analyzing the original typology to add further explanation of the development of credit union movements. By using transnational research, we revisit each of the three categories of the original typology to re-evaluate and expand upon the relevance of this particular model. We also include the elements of economy, society, education, and culture in other countries in this research. Our findings suggest that the stage of development of the credit union movement depends on the variables of asset scale, financial crisis, legislative framework, economy, society, and culture of the country. In addition, they indicate that the penetration rate of the credit union movement depends on the asset scale, loan ratio, credit union growth, financial crisis, economy, society, education, and culture of the country. This lends support to the recognition of the diversity of the credit unions' development.
In this paper, we compare the transmission of a conventional monetary policy shock with that of an unexpected decrease in the term spread, which mirrors quantitative easing. Employing a time-varying vector autoregression with stochastic volatility, our results are two-fold: First, the spread shock works mainly through a boost to consumer wealth growth, while a conventional monetary policy shock affects real output growth via a broad credit/bank lending channel. Second, both shocks exhibit a distinct pattern over our sample period. More specifically, we find small output effects of a conventional monetary policy shock during the period of the global financial crisis and stronger effects in its aftermath. This might imply that when the central bank has left the policy rate unaltered for an extended period of time, a policy surprise might boost output particularly strongly. By contrast, the spread shock has affected output growth most strongly during the period of the global financial crisis and less so thereafter. This might point to diminishing effects of large-scale asset purchase programs.
We analyze whether a depositor's familiarity with a bank affects depositor behavior during a financial crisis. Familiarity is measured by the presence of regional or local cues in the bank's name, while depositor behavior is considered in terms of depositor sensitivity to observable bank risk (market discipline exerted by depositors). Using the 2001–2010 bank-level and region-level data for Russia, we show the evidence that depositors use quantity-based discipline on all banks in the sample. The evidence of a price-based discipline mechanism, however, is virtually absent. We find that depositors of familiar banks were less sensitive to bank risk after a financial crisis than depositors at unfamiliar banks. To assure the results are driven by familiarity bias and not implicit support of regional governments to banks with regional cues in their names, we interact the variables with measures of trust in local governments and regional affinity. We find a "flight to familiarity" effect strongly present in regions with strong regional affinity, while the effect is rejected in regions with greater trust in regional and local governments. This suggests that the results are driven by familiarity rather than implicit protection from trusted regional or local governments.
Der Wirtschafts- und Finanzkrise von 2008 liegt ein multifaktorieller Ursachenkomplex zugrunde. Die vorliegende Arbeit analysiert die Möglichkeiten, die komplexen Sachverhalte mit den Mitteln des Strafrechts aufzuarbeiten. In diesem Zusammenhang wird vor allem auf ein Defizit im Hinblick auf ein strafrechtliches Abschreckungs- und Normintegrationspotential im Vorfeld der Krise hingewiesen. Eine detaillierte Darstellung der strafrechtlichen Subsumtion der krisenursächlichen Sachverhalte unter § 266 StGB führt zu dem Ergebnis, dass mehrere evidente und gravierende Pflichtverletzungen der Verantwortlichen vorliegen. Insbesondere wird dargelegt, ob Entscheidungen auf Grundlage ausreichender Informationen getroffen worden sind, Existenzgefährdungen vorlagen, ein ausreichendes Risikomanagement stattfand, das Schaffen von Klumpenrisiken pflichtwidrig war, welche Rolle Bonizahlungen spielten und ob Aufsichts- und Verwaltungsratsmitglieder ihre Überwachungspflichten verletzt haben. / »The Economical and Financial Crisis from a Criminal Law Perspective« -- The causes of the economical and financial crisis of 2008 are multifactorial. This dissertation is looking into the possibilities to analyse these causes from a criminal law perspective. A detailed record is presented and this record is analysed with Section 266 of the German Criminal Code (breach of trust). As a result certain violations of duty are identified like for e.g. a deficient risk management and acting without having a sufficient basis of information
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AbstractThis article seeks to advance debates about the financialization of housing by focusing on the emergence of rental housing as a frontier for financialization, a dynamic that is increasingly relevant since the global financial crisis. Situated in New York City, the research focuses on an aggressive wave of investment in affordable rent‐stabilized properties by private equity firms, their efforts to release value from these properties, and the implications of the 2008 financial crisis for their investment strategies and thus for tenants' experience of home. Through detailed empirical analysis tracing the connections between how rental housing has been constituted as a new site for private equity investment globally, the local conditions facilitating this process in New York and how it reshaped everyday life for tenants, the article theorizes tenants as unwilling subjects of financialization. Yet unwillingness does not necessarily translate into being overtaken; it also connotes reluctance and indeed struggle. This novel conceptualization highlights the ways in which financialization meets with dissent, and its necessarily contingent and incomplete nature. The article therefore develops the wider intellectual project of understanding financialization not as a monolithic and inevitable process, but as one characterized by resistance from without and contradiction from within.
Basel III introduces for the first time an international framework for liquidity risk regulation, reflecting the experience of excessive liquidity risk taking of banks in the run up to the financial crisis that erupted in August 2007, and associated negative externalities. As central banks play a crucial role in the liquidity provision to banks during normal times and in a financial crisis, the treatment of central bank operations in the regulation is obviously important. To ensure internalisation of liquidity risks (i.e. pricing of liquidity risk) and to address excessive reliance ex ante on central bank liquidity support by the banks, the regulation deliberately does not establish a direct close link with the monetary policy operational framework. While this reflects the purpose of the regulation and is also natural outcome of an international rule being applied under a multitude of very different monetary policy operational frameworks, this paper shows that the interaction between the two areas can be substantial, depending on the operational and collateral framework of the central bank. This implies the need for further study and the development of policies at the central bank and regulatory/supervisory side on how to handle these potential interactions in practice.
The pace of growth in the Philippines is slower than that of many neighboring countries, and despite increasing growth in the period before the current global financial crisis, domestic investment remained weak, and had a declining share in gross domestic product. Understanding limits to growth in the Philippines' economy and how they may be counteracted is crucial for policy makers seeking to encourage economic development. The pace of growth in the Philippines is slower than that of many neighboring countries, and despite increasing growth in the period before the current global financial crisis, domestic investment remained weak, and had a declining share in gross domestic product. Understanding limits to growth in the Philippines' economy and how they may be counteracted is crucial for policy makers seeking to encourage economic development. Diagnosing the Philippine Economy investigates the binding constraints on economic development, by following a growth diagnostics approach. Articles within this collection cover the areas of macroeconomic management; trade, investments, and production; infrastructure, human capital; equity and the social sector; poverty reduction efforts; and governance and political institutions. The studies' findings provide insight for politicians, academicians, and economists into the issues and their potential solutions.
The pace of growth in the Philippines is slower than that of many neighboring countries, and despite increasing growth in the period before the current global financial crisis, domestic investment remained weak, and had a declining share in gross domestic product. Understanding limits to growth in the Philippines' economy and how they may be counteracted is crucial for policy makers seeking to encourage economic development. The pace of growth in the Philippines is slower than that of many neighboring countries, and despite increasing growth in the period before the current global financial crisis, domestic investment remained weak, and had a declining share in gross domestic product. Understanding limits to growth in the Philippines' economy and how they may be counteracted is crucial for policy makers seeking to encourage economic development. Diagnosing the Philippine Economy investigates the binding constraints on economic development, by following a growth diagnostics approach. Articles within this collection cover the areas of macroeconomic management; trade, investments, and production; infrastructure, human capital; equity and the social sector; poverty reduction efforts; and governance and political institutions. The studies' findings provide insight for politicians, academicians, and economists into the issues and their potential solutions.
This policy letter adds to the current discussion on how to design a program of government assistance for firms hurt by the Coronavirus crisis. While not pretending to provide a cure-all proposal, the advocated scheme could help to bring funding to firms, even small firms, quickly, without increasing their leverage and default risk. The plan combines outright cash transfers to firms with a temporary, elevated corporate profit tax at the firm level as a form of conditional payback. The implied equity-like payment structure has positive risk-sharing features for firms, without impinging on ownership structures. The proposal has to be implemented at the pan-European level to strengthen Euro area resilience.
Inhaltsangabe: Abstract: The US subprime-crisis became a headline in the global media starting in February 2007 after the US housing market had already shown first signs of a slowdown in late 2006. Previously, the US housing market had enjoyed a favorable environment, especially from 2002 to 2005, which was characterized by low interest rates, rising house values, and increasing home financing possibilities through subprime mortgages. However, more and more events were published during the year by US mortgage brokers, international investment banks, and central banks around the world that presented a picture which caused today's perception of the subprime-crisis. What's more, the subprime-crisis is far from being over: an end to the crisis is not yet in sight. One rather unique characteristic of this crisis is that its actual basis is the delinquencies and defaults of subprime single-family home mortgages in the US which is commonly not regarded to be of great relevance for the international capital markets. However, taking into account the originate and distribute business model of US mortgage brokers in connection with the securitization of these mortgages into various types of securities that are traded on a global basis, it is not surprising to observe that banks and investment funds around the world were invested into these securities. Before the crisis started, only a few banks or funds considered the liquidity of these securities when investing significant amounts of money in them because they focused on maximizing their returns. But, when larger problems in the US subprime mortgage market became evident, liquidity became the major concern for investors and investor preferences significantly shifted to safer assets such as government bonds. This caused severe problems in the money market, which ultimately brought the crisis across the Atlantic to Europe. Moreover, funding problems emerged and caused the first bank run in Europe in decades when depositors in Britain started to queue outside Northern Rock branches for hours to withdraw their deposits in light of fears that the bank might have to file for bankruptcy. In addition, another British bank had been in the spotlight earlier that year because HSBC was the first European bank to announce a billion dollar write-off linked to its exposure to subprime mortgages. Taking into consideration the subprime-crisis-related events in Europe, the British banking market can be characterized as the only banking market in Europe where the subprime crisis caused banks to substantially write down subprime-related assets on the one hand but where severe funding problems even led to a bank run that had to be bailed out by the central bank and the government on the other hand. Consequently, the British banking market can be considered to be the European banking market with the highest impact of the subprime-crisis and is, therefore, worth analyzing in detail. The objective of this thesis is to discuss the reasons for the emergence of the subprime-crisis and to empirically examine whether the subprime-crisis had an impact on the British Banking sector. The empirical analysis consists of two different approaches whereas an event study measures the short-term impact of certain news. The performance of the British banking sector in the full year 2007 is analyzed in a second approach that focuses on the long-term impact of the subprime-crisis. In addition, the paper provides an overview on the development of the subprime-crisis in 2007 based on a detailed description of the underlying fundamental market characteristics. In order to empirically measure the impact of the subprime-crisis on British banks, an event study will be conducted. Event studies are a widely-used empirical methodology in economics and finance to examine the impact of certain events: they are considered to be the standard method to measure security price reactions. An event study is an empirical study that measures if specific events have a significant impact on certain stock prices by calculating abnormal stock returns around predefined events. In this regard, an abnormal return is the difference between the actual return in the market and the expected return according to a return generating model. A common assumption in this regard is that positive events lead to positive abnormal returns whereas negative events cause the abnormal returns to be negative. Consequently, important news relating to the subprime-crisis will be categorized as positive or negative and its impact on stock returns will be determined. The event study, as well as the timeline of the subprime-crisis, include events from January 1, 2007 to December 31, 2007. The analysis of the year-round performance of the British banking sector in 2007 is conducted in addition to the event study and follows a different methodology. In contrast to the analysis of the impact of individual events, this approach deals with the performance of British banks and compares this to the performance of an alternative non-bank portfolio. Key to this analysis is that both portfolios have the same risk and return characteristics at the beginning of 2007 that have been determined through a backtesting of the portfolios' performance in 2006. Course of the Investigation: In the second chapter, important fundamentals of the subprime-crisis will be examined. These fundamentals explain how an environment was able to develop in the last decades that lay the foundation for today's crisis. In Chapter 2.1, an overview about the development and the structure of the US subprime mortgage market will be presented before specific characteristics of subprime mortgages will be outlined in 2.2. The unique business model of mortgage brokers is depicted subsequently. The last segments of Chapter 2 specify complex financial instruments that enabled the subprime-crisis to spread around the world and explain why the securitization process leads to high-risk securities. Chapter 3 specifically describes the development of the subprime-crisis in 2007. After presenting an overview about the situation of the US housing market up to 2007 in 3.1, a timeline about last year's subprime-crisis is outlined in 3.2, and the impact on international capital markets is discussed in 3.3. Chapter 3.4 focuses on the consequences for British banks and the actions of the British financial regulatory environment. An empirical analysis of the subprime-crisis is conducted in Chapter 4. A general overview about event studies and their historic development is presented in 4.1. After deducing the typical framework of an event study in 4.2, the relevant British banks in line with its market index as well as relevant news for the event study are determined in Chapter 4.3. The actual event study that analyzes the impact of the subprime-crisis on British banks will be presented in Chapter 4.4. Additionally, a comparison of the performance of a bank portfolio with an alternative non-bank portfolio is given in 4.5. Finally, Chapter 5 contains a summary of the theoretical concepts and the empirical results and gives an outlook about a potential development of the subprime-crisis, capital markets, and specifically the British banking market. Ideas for further research are also presented.Inhaltsverzeichnis:Table of Contents: LIST OF FIGURESI LIST OF TABLESII LIST OF ABBREVIATIONSIII 1.INTRODUCTION1 1.1Motivation and Objective1 1.2Course of the Investigation3 2.FUNDAMENTALS OF THE SUBPRIME-CRISIS4 2.1The US Housing and Subprime Mortgage Market4 2.2Characteristics ofSubprime Mortgages7 2.3Business Model of US Mortgage Brokers9 2.4Financial Instruments Underlying the Subprime-Crisis10 2.5Consequences of the Fragmented Securitization Process14 3.THE DEVELOPMENT OF THE SUBPRIME-CRISIS15 3.1Situation of the US Housing Market up to200715 3.2Timeline of the Subprime-Crisis in 200717 3.3Spillover Effects from the Mortgage Market to the Global Capital Markets21 3.4Consequences for the British Banking Market22 4.EMPIRICAL ANALYSIS ABOUT THE SUBPRIME-CRISIS27 4.1History and Overview of Event Studies27 4.2Framework of an Event Study28 4.3Selection of Relevant Data31 4.3.1British Banks and Market Index31 4.3.2News about Private Financial Institutions and Central Banks32 4.4Event Study About the Subprime-Crisis34 4.4.1Event Study Methodology34 4.4.2Formulation and Testing of Hypotheses36 4.4.3Interpretation of Results37 4.5Year-round Performance of the British Banking Sector in 200740 5.SUMMARY AND CONCLUSION43 REFERENCES45 APPENDIXES51Textprobe:Text Sample: Chapter 3.2,Timeline of the Subprime-Crisis in 2007: In February 2007, the first signs appeared that subprime mortgage brokers were in trouble as ResMae Mortgage filed for bankruptcy and Nova Star Financial reported a loss that was not expected by analysts. It was also the beginning of European banks having to announce losses that were caused by the subprime-crisis. HSBC reported losses of Dollar 10.5bn in its mortgage finance subsidiary in the US and, consequently, fired the head of that particular division. Problems of US mortgage brokers became more and more evident in March 2007 as People's Choice was the next mortgage broker that had to declare bankruptcy. Moreover, the brokers Fremont General and New Century Financial stopped making new subprime mortgages. Two weeks later, rumors appeared that New Century Financial may have to file for bankruptcy as well and these rumors became true in the beginning of April when the company had to file for Chapter 11. In May, the next European bank announced an involvement in the subprime-crisis when UBS had to close its US hedge fund operation Dillon Read Capital Management. In June 2007, rating agencies began appearing in the crisis. Moody's downgraded 131 subprime MBSs and announced to review the rating of an additional 260 securities. Moreover, two Bear Stearns hedge funds that heavily invested in subprime-backed securities lost a significant part of their value and Bear Stearns had to bail-out the hedge funds and provide them with Dollar3.2bn to cover their subprime exposure. As a result, they fired their head of asset management who was responsible for the hedge fund business. July 2007 is considered the first month when the subprime-crisis had a significant impact on the stock market. After closing above 14,000 points for the first time in history, the Dow Jones lost about seven percent until the end of September. UBS brought the crisis back to Europe once more when they suddenly fired their chief executive officer (CEO) Peter Wuffli, mentioning problems relating to the subprime crisis as the cause of this decision. Ration agencies also played a major role in July when Standard Poor's (SP) and Moody's downgraded the ratings of subprime MBSs with values of Dollar 7.3bn and Dollar 5.0bn, respectively. On July 7, SP announced a review of the ratings of numerous CDOs with investments in subprime structured products; Moody's was said to review 184 mortgage-backed CDO tranches. Mortgage brokers were in the spotlight again when American Home Mortgage had difficulties in the refinancing of loans. Countrywide, another major mortgage broker announced a drop in earnings as more and more of their subprime loans defaulted. Fed Chairman Ben Bernanke also mentioned rising defaults in the subprime market and estimated that total losses caused by the subprime crisis could add up to Dollar 100bn. Suddenly, on July 30, the German bank IKB Deutsche Industriebank (IKB) had to announce that one of its ABCP conduits that invested in subprime structured products had troubles refinancing itself. As a consequence, IKB's main shareholder, state-owned KfW, had to bail-out IKB and guaranteed liquidity lines for the conduit Rhineland Funding. One day later, on August 1, 2007, the whole picture of IBK was presented to the public. Total losses due the Rhineland Funding conduit were Euro 3.5bn and a rescue fund by KfW and other German private banks was installed. The mortgage broker American Home Mortgage finally declared bankruptcy and extended the terms on ABCP that were issued by one of its funding conduits. Liquidity problems in the markets for structured products became obvious when BNP Paribas stopped the redemption of three of its funds with a total value of Euro 2bn because they were not able to calculate a fair price for the funds due to the illiquid subprime MBS market. This announcement triggered concerns about market prices of structured credit products in general and interbank lending rates such as LIBOR strongly increased as banks sought liquidity. ABCPs were also priced with higher premiums. This closure of BNP Paribas funds can be regarded as one of the key events in the subprime-crisis because it caused central banks to heavily intervene in the money markets. One day later, the European Central Bank (ECB) injected Euro 95bn of short-term liquidity into the European money market and, subsequently, the Fed as well as the Bank of Japan provided liquidity to their respective money markets. These central banks continued to provide hundreds of billions of dollars of short-term liquidity to the global money markets in the following weeks. The Fed intervened again, by reducing the discount rate in order to provide liquidity to the markets. Goldman Sachs was the next company that had to inject money into a hedge fund in mid-August. The investment bank injected Dollar3bn into one of its hedge funds that suffered from losses in subprime structured products. Citigroup closed seven SIVs with a value of Dollar49bn and took the SIVs' subprime debt on its balance sheet as the SIVs were not able to receive funding due to the illiquidity in the money markets. Morgan Stanley announced to a write-off of Dollar 9.4bn due to investments in the subprime market and sold a 9.9 percent stake to a Chinese investment company in order to strengthen its equity base later that month. Countrywide also suffered from the illiquid markets and had to draw down Dollar 11.5bn from the company's credit lines before receiving a Dollar2bn cash injection from Bank of America. Similar to the losses of IKB, SachsenLB, another German bank, reported refinancing problems in one of its conduits that invested into subprime mortgage products and was, consequently, sold to LBBW after receiving a Euro17.3bn credit line. Looking at the British Banking market, Barclays received a Pounds1.6bn short-term loan from the Bank of England. In the beginning of September 2007, it became evident that the subprime-crisis was a truly global crisis when Bank of China revealed that they made losses of Dollar 9bn that can be attributed to subprime investments. The major event of the subprime-crisis in Britain started on September 13, when the BBC announced that Northern Rock received an emergency loan from the Bank of England in order to solve its refinancing problems. As a consequence, a bank run started that could only be stopped when the British government guaranteed all savings. A more detailed analysis of Northern Rock is presented in Chapter 3.4. A number of investment banks announced their quarterly results in September. Goldman Sachs reports net earnings of Dollar 2.8bn, which were mainly due to short positions in structured subprime mortgage products, whereas Deutsche Bank announced losses of Euro1.7bn. HSBC had losses of Dollar 880m in the third quarter and announced the closure of its US subprime mortgage unit. International banks continued to announce quarterly results in October. UBS reveled an unexpectedly high loss, wrote down Dollar3.4bn in its fixed income division, and fired its Chief Financial Officer and its investment banking head. Moreover, Citigroup had to write-off Dollar 5.9bn in addition to its earlier write-offs. Merrill Lynch's write-offs accounted for Dollar 7.9bn and caused total losses of Dollar 2.3bn. As a result, CEO Stan O'Neil resigned from his position. The Japanese Bank Nomura also announced a substantial loss and closed its US MBS department. The US government initiated the Hope Now initiative that was set up in order to support homeowners to avoid defaults on their mortgage. The US Treasury Department also made major US banks install the Master Liquidity Enhancement Conduit that was supposed to buy illiquid structured products to reestablish liquidity in the market. SP downgraded another Dollar23bn worth of structured products that were backed by mortgage loans and unlike the downgrades in August, SP also downgraded securities that had an AAA rating before. On October 31, the Fed announced the expected reduction of the federal funds target rate by another 25 basis points to 4.5 percent. Investment banks continued to report their subprime exposure in November 2007. Citigroup started with admitting an additional write-down requirement between Dollar8bn and Dollar11bn after already having to write-off Dollar5.9bn in October. As a consequence of these substantial losses, CEO Charles Prince resigned. Morgan Stanley reported a Dollar3.7bn loss in its subprime mortgage investments, whereas Wachovia announced a total loss of Dollar1.7bn. Bank of America wrote off Dollar3bn due to investments in the subprime market and the GSE Freddie Mac reported a loss of Dollar2bn. Besides US banks, UK banks were also again affected by the subprime-crisis. Barclays and HSBC had to write down Dollar2.7bn and Dollar3.4bn, respectively. At the end of November, Citigroup announced an increase in its equity base and sold additional shares to an investment fund based in Abu Dhabi in order to raise Dollar7.5bn. Moreover, Freddie Mac increased its equity by issuing Dollar6bn worth of new shares. In line with Freddie Mac's capital increase, Fannie Mae also issued new shares worth Dollar7bn in the beginning of December 2007. On December 3, Moody's announced a review of additional subprime debt. The British banks Royal Bank of Scotland and Lloyds TSB reported subprime write-offs with a value of Pounds1.25bn and Pounds200m, respectively. On December 6, the Bank of England lowered the interest rate by 25 basis points while the ECB left the interest rates at a constant level following its regular meeting on the same day. In the US, the Fed lowered the discount rate by 25 basis points one week later although some directors were in favor of a 50 basis points interest rate cut. UBS announced that the bank had to write-down another Dollar10bn due to its subprime mortgage market investments. In addition, the company received an Dollar11.5bn capital infusion by investors from Singapore and the Middle East. The last banks that reported substantial losses in 2007 were Washington Mutual, who reported fourth quarter losses of Dollar1.6bn and Morgan Stanley, who wrote off an additional 9.4 Dollar bn and also sold new equity to a foreign investor. In order to provide European banks with sufficient liquidity at the end of the year, the ECB provided banks with 500 Dollar bn at the end of December. This timeline of the development of the subprime-crisis in 2007 shows the huge impact on the international financial markets and global financial institutions that the problems in the US subprime mortgage market have caused. The next chapter will highlight how the crisis in the subprime mortgage market was able to spill over to other asset classes on a global basis. In order to understand the consequences of the subprime-crisis and especially the need for central bank interventions in the money markets, it is necessary to understand the emergence of the liquidity crisis that appeared in the second half of 2007. Many economists such as Buiter define August 9, 2007 as the day when the subprime-crisis was evidently the trigger for the global capital markets crisis. The closure of the BNP Paribas funds due to its inability to value ABS had a spill-over effect on many asset classes and also forced the central banks to massively intervene in the money markets. In economic theory, these spill-over effects are called contagion, which is defined as the spread of a crisis from one specific market into different countries or asset classes. One major consequence was the widening in credit spreads in the global money markets that were caused by the liquidity shortage in the interbank market. Banks across the globe were more and more uncertain about other banks' involvement in subprime MBSs and CDOs and the financial health of their counterparties in money market transactions and became reluctant to lend money, even on a short-time basis. As a result, a liquidity crisis occurred that forced the central banks to provide enormous amounts of liquidity to the interbank markets. One characteristic of the liquidity crisis was a so-called flight to quality which means that banks and fund managers sell riskier assets such as subprime MBSs and CDOs and invest in safe assets such as government bonds. A flight to quality is generally regarded to be based on uncertainty in the markets or uncertainty about counterparties rather than on the risk of specific assets itself. This also seems to hold true for the subprime-crisis. Due to the large supply in these risky asset classes, the markets for MBSs, CDOs, and ABCPs became very illiquid because many sellers were opposing few buyers. As a result, credit spreads in these asset classes significantly increased. As a reaction to the liquidity crisis in the interbank market, central banks intervened several times and provided liquidity to the market.
The rise of the international matchmaking industry has been particularly rapid and noticeable in the former Soviet Union, where the end of the Cold War has intersected with daily socioeconomic pressures to make cross-cultural romance and marriage newly possible and newly desirable for some women of Russia, Ukraine, and other post-Soviet states. Less acknowledged than the role of economics in women's decision making, however, is the fact that postsocialist financial strains are not experienced in social vacuums but are mediated by ideals of gender and marriage, such that the search for a foreign spouse is unlikely to be experienced as a simple desire for increased material comfort. Instead, discourses of gender "crisis" in the home country inform the desires for transnational kinship for both women from the former Soviet Union and men from the United States. When both women's and men's narratives of "crisis" (and how transnational marriage might alleviate it) are taken into account, they significantly complicate our understandings of east-west relations of "commodification" and power.
The fall in public revenue by local governments, as a consequence of the finance dependence on the real estate sector, is combined with a process of fiscal adjustment and a growing demand for social services, which is result of rising socioeconomic exclusion rates (less consumption, business closures, and unemployment). The economic crisis, accompanied by a crisis of ethics and values, refers to the emergence of the Public Ethics as a tool for social policy-making and institutional strengthening. The incessant search for legitimacy and consensus, not so much in relation to the output of public social policies, but also about the dialog and deliberative process itself, puts local entities facing the challenges in the strengthening of the political body as a prerequisite for commissioning and developing successful participatory and deliberative processes. The promotion of socio-economic conditions to ensure social cohesion, freedom and equal opportunities, become a challenge that transcends the literalness and urgency of financial statements and budget processes in a fiscal adjustment context. The article reviews the main trends and challenges related to the role of Public Ethics in making public policy budget, citizen participation and social inclusion by local governments. All this, in a context of economic crisis, progressive social weakening, fiscal adjustment of the local public ; La caída de ingresos en el ámbito local como consecuencia, en gran medida, de la dependencia que han experimentado las Entidades Locales (EELL) españolas respecto del sector inmobiliario, confluye con un proceso de ajuste fiscal y con una creciente demanda de servicios sociales derivada de las ascendentes tasas de exclusión socioeconómica (menor consumo, cierre de empresas, desempleo). La crisis económica, acompañada de una crisis ética y de valores, remite a la emergencia de la Ética Pública como instrumento para la adopción de las políticas sociales y de refuerzo institucional y democrático. La búsqueda constante de legitimidad y de consenso, no tanto en relación al output de las políticas públicas sociales, sino sobre el propio procedimiento deliberativo y de diálogo en su definición y adopción, ubica a las EELL ante el reto de fortalecer el cuerpo político como premisa para la puesta en marcha y el desarrollo, con éxito, de procesos participativos y deliberativos. El fomento de las condiciones socioeconómicas precisas para garantizar la cohesión social, la libertad y la igualdad de oportunidades, devienen en retos que trascienden en mucho la literalidad y la urgencia de los balances contables y presupuestarios en un proceso de ajuste fiscal. El artículo repasa las principales tendencias y los retos emergentes en relación al papel de la Ética Pública en la adopción de las políticas públicas presupuestarias, de participación ciudadana y de inclusión social impulsadas desde las instituciones de gobierno local. Todo ello, en un contexto de crisis económica, progresivo debilitamiento social, ajuste fiscal del Sector Público local, desconfianza ciudadana respecto de las instituciones y creciente pluralismo axiológico.