Thursday, September 21, 2017

21/9/17: Another reminder: Financial Crises are becoming more frequent & more disruptive


As recently noted by Holger Zschaepitz @Schuldensuehner, new research from Deutsche Bank shows that "Post Bretton Woods (1971-) system vulnerable to crises. Frequency of Financial Crises increased since then. Growth of finance encouraged trend".



Of course, readers of this blog would have known as much by now.  Almost 2.5 years ago I wrote about research by Claudio Borio of BIS on the same topic (see http://trueeconomics.blogspot.com/2015/05/8515-bis-on-build-up-of-financial.html) and Borio's findings are linked to his own earlier work on excess financial elasticity hypothesis (see http://trueeconomics.blogspot.com/2011/11/07112011-dont-blame-johnny-foreigner.html).

So while the DB 'research' simply replicates the findings of others who paved the way, it does present a nice picture of the amplified nature of financial crises in recent decades, both in terms of timing/frequency and in terms of impact.

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