Global Financial Crisis and European Banking
The last months of 2008 witnessed the worst global financial crisis since the Great Depression of 1929–1930. The first indications of a serious crisis appeared on 15 January 2008, with the news of a sharp drop in profits of the Citigroup, which led to a significant fall on the New York Stock Exchange.1 This was followed by a spectacular fall in share prices in all major world markets and, as a result, a number of US and EU banks declared massive losses in their 2007 end-of-year financial statements. In fact, the global financial crisis, which started in the US and expanded its area of impact by spilling over to Europe and Asia, entered a new phase when Lehman Brothers, one of the leading investment banks in the US, filed for bankruptcy protection in September 2008. The situation, which emerged as a liquidity problem in the inter-bank markets during the early stages of the crisis, gradually turned into concerns regarding the reliability of financial institutions.
KeywordsCentral Bank Euro Area Hedge Fund Global Financial Crisis Credit Default Swap
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