This is a systemic question, since the great depression.

https://en.wikipedia.org/wiki/Chicago_plan

https://en.wikipedia.org/wiki/The_Chicago_Plan_Revisited

No ethical and economic reform is possible without separating the systemic functions of money and credit, for example. Economic cycles and conjuncture are deeply connected to the systemic behavior of monetary tools and their techniques of emission, respectively circulation. Private commercial banks have gained a legal and global monopoly to create bank credit money, which is now fired by total fiat money.

By creating core value in business

It was not simply bad banking practice that led to the economic crisis of 2008. The other most significant factor was the way landlords tend to speculate in rising land values. Of course the banks did encourage them with their low rates of interest on loans and the allowance of mortgages without proper supervision of clear rules for this procedure.

But even were the banking rules to be modified and improved, it is doubtful if the same situation will not occur again. This is because the nature of the speculation in land values will not stop, as long as the government continues to encourage it by allowing unused sites to not be limited in the time they remain unused (and the resulting rises in price for sale or access (rent) to those sites that are available).

The solution is to make speculation in land values not worthwhile by taxing land values regardless of whether the site in question is in use or not. Unused sites being withheld for purposes of speculation, will not cause the prices of those in use to be so highly competitive in their availability that the building community reaches a stage where they can no longer afford them and the bubble bursts.

The best bank is your pillow.

Don't blame banks - the government was at fault.

Interesting that most (all)here ignore the role of government in the 2008 crisis. The government encouraged banks to take questionable loans. The encouragement was direct in the big banks - that is why the gov. had to bailout the big banks.Also, the prime interest rate was held below what the market was demanding by the Fed. The gov. was using interest rates to encourage money turnover (G2). This has a stimulating effect on the economy which is what the leaders wanted to look good. The long term result of stimulation is a "bubble" which when bursts is cataclysmic to the society, just like the inflation bubble of the 50s and resultant stagflation.

The feds raising the interest rate now is to correct continued mismanagement of politicians for the last decade - to avoid another natural correction.

Consider ending limited liability for bank managers and controlling shareholders.

You may like the discussion in the following link: https://www.econlib.org/archives/2012/02/limited_liabili.html

Best, Leo

The above question inspired me to the following considerations:

What will be the main sources of the next global financial and economic crisis?

What will be the main sources of the next global financial and economic crisis, which could be faring in the next dozen or so years?

Will they be analogous to the crisis source as in the situation of previous global financial and economic crises?

Will the next global economic crisis be triggered by the financial crisis?

Will the next financial crisis be started similarly to the previous bankruptcy by a large financial institution, a large bank or a corporation?

Will the declaration of bankruptcy by a large business entity trigger strong drops in over-valued securities on securities exchanges?

However, will such huge reserves of money be accumulated in central banks, including those reprinted on a regular basis, that in the situation of potential loss of liquidity by a large, economic entity, the economy will not fail because it will be saved from bankruptcy in the framework of state aid, as part of state intervention?

Is the principle still valid that "the big one can not get stuck" because it will be saved by the government to prevent the emergence of a new large scale of the financial and economic crisis?

Or maybe in the perspective of the next years will also be completely different factors that generate a decline in economic efficiency and a deterioration in the emergence of a crisis in real economies?

Please reply

I invite you to the discussion

Thank you very much for your response and participation in the discussion

Best wishes

Get rid of the Federal Reserve. Economic crises occur as a kind of cleansing. Government makes them last longer and deeper.

Are the results of scientific research available that were aimed at answering the following question ?: To what extent unethical and inconsistent banking practices led to the acceptance of financial transactions characterized by high and unsecured level of credit and investment risk and indirectly contributed to the global triggering the financial crisis of 2008?

Please reply

The same as the last one and for the same reason, greed.

Dariusz Prokopowicz

Not the banks - the government encouraged bank to take loans on housing they would not have done. The price for following the gov's directives, the banks wanted insurance against the questionable loans. That is why the gov. "bailedout" the lenders. Secondly, interest rate is set by the Federal Reserve a government body. So, to answer the question - "get the government out of the business ov directing bank policy.

The loans that the banks encourage would-be landowners to take, are attractive to both because under our social system land tends to increase in its price for most of the "business cycle'. This is due to the way cities grow in size and development land on its periphery becomes more useful and valuable. Our taxes are used by the local and national government for creating many improvements to the infrastructure which (along with natural population increase) make the land more productive and useful. But the benefit of this is confined to those who own the land and privatize its rent.

However this speculation and monopolization of land is an unstable phenomenon and about every 18 years, the prices of sites become so high that builders no longer find it worthwhile to continue their activities and they slow down or stop providing accommodations and work places. This is when the land value bubble bursts, and all those who recently got mortgages on their sites and hoped to speculate in their values, realized that they were paying the banks for something on which a profit was no longer possible. The toxic mortgages were sold to other banks in some cases and the result was abandoned properties and huge bank losses, when people who loaned money to the bank wanted it back.

Had the greed of the land owners and banks not existed, this unstable nature of our society would never happen. It can be eliminated and greater and more equal opportunities can be created when the taxation regime is changed and land values are taxed and all other kinds of taxation reduced and much of it stopped. No speculator in the value of a site of land wants to have to return most of its potential (or actual) rent to the government. TAX LAND NOT PEOPLE; TAX TAKINGS NOT MAKINGS!

Many years ago, John Maynard Keynes said:

"One of the things that I barely understand is, next to the end of the world, an insecure risk, and there is no point in worrying about it." John Maynard Keynes

However, after the global financial crisis of 2008, the view on risk management could have changed significantly. There has been an increase in the importance of reliable performance and improvement of risk management processes, including the application of the principles of business ethics and corporate social responsibility.

What is your opinion on this topic?

I am asking for an answer and invite you to a discussion,

Thank you very much and best regards,

Dariusz Prokopowicz

Karen A. Darbinyan Either you keep in bank or in pillow, sleep will be hampered. Only the reason will differ.

Dear Agnishwar Girigoswami,

That's right. There is a risk in every situation. But each situation is slightly different in the context of a specific economic reality, the current conditions of monetary policy and the economic situation. The key issue is therefore to diagnose specific risks.

Best wishes,

Dariusz Prokopowicz