A Review of Causes of Occurrence and Spreading of the Global Financial Crisis with an Emphasize on the Complexity Approach

Document Type : Research Paper

Authors

1 Member of faculty of accounting department of Isfahan University

2 University of Isfahan Ph.D. Student

3 Ph.D. Student, Accounting University of Isfahan

Abstract

Despite the global economic boom in the past decades, the world in 2007 and 2008, experienced the huge financial crisis which although it started in America, but had devastating effects on the financial markets around the world. This article is trying to analyses the causes of occurrence and spreading of global financial crisis. This article analyses the global financial crisis in two parts. The first part reviews the factors and viewpoints about the causes of “occurrence of the crisis” and the second part, with the help of the Complexity Approach, analyses the causes of “Spreading the crisis” around the world. Growing the real asset mortgage bubbles, excessive use of financial derivative instruments, too much optimism in risk assessment, weak corporate governance, individual self-interest, weakness of market monitoring regulations and etc. are some factors that have caused the global financial crisis. This article has examined the global financial crisis from different viewpoints. This viewpoints include Macroeconomic perspective, Finance and Accounting perspective, Legal and Regulatory perspective, Corporate Governance perspective and etc. So a general conclusion is obtained from the global financial crisis. 

Keywords

References

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History

  • Receive Date: 15 June 2015
  • Revise Date: 29 April 2015
  • Accept Date: 22 August 2015

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