Financial Instability

Part I of Essay
The soaring volume of international finance and increased interdependence in recent decades has increased concerns about volatility and threats of a financial crisis. This has led many to investigate and analyze the origins, transmission, effects and policies aimed to impe ....

Part II of Essay
.... The second is a political interpretation dealing with the declining status of a hegemonic anchor of the financial system. The question of whether regulation causes or mitigates financial instability is raised by the third interpretation; while the fourth view deals with the “trigger point” phenomena. To fully comprehend these interpretations we must first understand and differentiate between a “currency” and “contagion” crisis. A currency crisis refers to a situation is which a loss of confidence in a country's currency provokes capit ....