POLSCI 2H03 Lecture Notes - Lecture 13: Latin American Debt Crisis, Mexican Peso Crisis, Basel I
6 Apr 2016
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Our period of inancial globalizaion began in the 1960s o o. euromarkets began with us$ bank accounts in london o o o. Us keeping control over low of money but allow corporaions access. Period of stability up unil 1960, lux ater. More capital mobility resulted in banking crisis increase. Equal to all foreign assistance to developing countries, 50-01. Greater proporion of economies are taken up by inancial transacions. In the banking sector it increased dramaically compared to private sector o. Financial industry lobbying, jan 1-aug 1 2010: million o o. Funcion: take short term deposits and convert it into something that can be use towards long term assets. Employees: monitor credit worthiness (idea is its eicient) Ceo and shareholders" goals may not align (p-a dilemma) I, 88: bank capital must be 8% of risk weighted assets o. Have to hold 8% capital for risky investments (wealthy got o%, poor countries 8%)
