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Chapter 2: A trust-driven financial crisis

Author

Listed:
  • Giancarlo Corsetti
  • Michael P. Devereux
  • Luigi Guiso
  • John Hassler
  • Gilles Saint-Paul
  • Hans-Werner Sinn
  • Jan-Egbert Sturm
  • Xavier Vives

Abstract

There are many important dimensions of the, hopefully overcome, financial crisis that have appeared in the vast debate that it has originated: its unprecedented size at least in the post World War II period; the fact that, contrary to many other financial crises (but similar to the 1929 collapse) it originated and had its epicenter in the US; its nature, the ingredients and proximate causes that triggered it: too much financial deregulation?; too relaxed monetary policy?; too much concentration of power in the hands of the banks following the impetuous wave of mergers during the late 1990s that amplified moral hazard and risk taking?

Suggested Citation

  • Giancarlo Corsetti & Michael P. Devereux & Luigi Guiso & John Hassler & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2010. "Chapter 2: A trust-driven financial crisis," EEAG Report on the European Economy, CESifo, vol. 0, pages 53-70, February.
    • Handle: RePEc:ces:eeagre:v::y:2010:i::p:53-70
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    File URL: https://www.cesifo.org/DocDL/eeag_report_chap2_2010.pdf
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    References listed on IDEAS

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    1. Philippe Aghion & Yann Algan & Pierre Cahuc & Andrei Shleifer, 2010. "Regulation and Distrust," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(3), pages 1015-1049.
    2. Tullio Jappelli, 2010. "Economic Literacy: An International Comparison," Economic Journal, Royal Economic Society, vol. 120(548), pages 429-451, November.
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    5. Shawn Cole & Xavier Gine & Jeremy Tobacman & Petia Topalova & Robert Townsend & James Vickery, 2013. "Barriers to Household Risk Management: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 104-135, January.
    6. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2009. "Cultural Biases in Economic Exchange?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(3), pages 1095-1131.
    7. Paola Sapienza, 2009. "Trust and Financial Markets," World Scientific Book Chapters, in: Douglas D Evanoff & Philipp Hartmann & George G Kaufman (ed.), The First Credit Market Turmoil Of The 21st Century Implications for Public Policy, chapter 4, pages 29-38, World Scientific Publishing Co. Pte. Ltd..
    8. Luigi Guiso & Tullio Jappelli, 2008. "Financial Literacy and Portfolio Diversification," EIEF Working Papers Series 0812, Einaudi Institute for Economics and Finance (EIEF), revised Oct 2008.
    9. Markus Knell & Helmut Stix, 2009. "Trust in Banks? Evidence from normal times and from times of crises," Working Papers 158, Oesterreichische Nationalbank (Austrian Central Bank).
    10. repec:hal:spmain:info:hdl:2441/4km7l02j139aj8hl7kcccmqk9s is not listed on IDEAS
    11. Philippe Aghion & Yann Algan & Pierre Cahuc & Andrei Shleifer, 2010. "Regulation and Distrust," The Quarterly Journal of Economics, Oxford University Press, vol. 125(3), pages 1015-1049.
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    Cited by:

    1. Algan, Yann & Cahuc, Pierre, 2014. "Trust, Growth, and Well-Being: New Evidence and Policy Implications," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 2, pages 49-120, Elsevier.
    2. Carin van der Cruijsen & Jakob de Haan & Ria Roerink, 2021. "Financial knowledge and trust in financial institutions," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(2), pages 680-714, June.

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