After the global financial crisis of 2008, did investment banking properly and reliably improve its banking procedures and credit risk management systems so that a similar crisis would not happen again?

The global financial crisis of 2007-2009 was the result of a number of factors that started as early as the 1990s and were then compounded at the beginning of the 21st century. Many mistakes were made at the time, both at the level of monetary policy, in terms of over-liberalisation of the functioning of financial markets and banking entities (in the mid-1990s, the separation of the functioning of deposit and loan banking from investment banking was abolished). Allowed to grant mortgages to uncreditworthy citizens. The missing funds for granting bad loans, i.e. loans that in 99 per cent probability would not be repaid on time, were no longer obtained from bank deposits but from derivative securities issued for this purpose, which were sold as subprime bonds to successive investment banks as secure and profitable investment financial instruments. Credit rating agencies gave these credit derivatives the highest AAA ratings, which just before the onset of the global financial crisis was no longer factually correct and was a clear example of a breach of good business ethics. There was also a high level of systemic credit risk arising from the underwriting of many of the thus unreliable mortgages by a small number of commercially operating insurance companies. There has been a lot of unreliability, the application of unethical business practices in credit risk management both at a systemic level and at the level of individual banking entities. The credit risk management process in investment banks at the beginning of the 21st century was not working efficiently and effectively. The banking procedures were not adequately adapted to the current realities of the technological advances taking place and new financial instruments, derivatives being created in a highly liberalised prudential standard of credit risk control. I have researched this issue and described these issues in publications that are posted on my profile on this Research Gate portal. I had researched the issue of improving the credit risk management processes carried out in commercial banks even before the global financial crisis of 2007-2009. Some procedural and normative issues have been corrected but rather not all, which should be corrected so that a similar financial crisis does not occur again in the future.

In view of the above, I address the following research question to the esteemed community of researchers and academics:

In the aftermath of the 2008 global financial crisis, has investment banking properly and reliably improved its banking procedures and credit risk management systems so that a similar crisis will not occur again?

What is your opinion on this subject?

Please reply,

I invite you all to discuss,

Thank you very much,

Best wishes,

Dariusz Prokopowicz