Global financial crisis: cause, consequences and the impact on Serbian economy

Hanić, Hasan and Duran, Edo and Lazić, Milena (2014) Global financial crisis: cause, consequences and the impact on Serbian economy. In: Contemporary trends and prospects of economic recovery. CEMAFI International Association, Nica, pp. 337-351. ISBN 978-2-9544508-5-8

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The worldwide financial crisis that began in 2007 was set off by the collapse of the subprime mortgage market in the USA. A combination of bad loans packaged in MBS (mortgage-backed securities) and type of credit insurance called CDS (credit default swaps) followed by the fall in property prices has led to the biggest drop in stock market index since the Great Depression in 1930 in USA. A credit default swaps and mortgage-backed securities are designed to transfer the credit exposure of fixed income products between parties. Those derivative products transferred part of the risk of USA mortgage market to global market. Almost a quarter of the USA credit derivatives are bought by foreign banks, which led to global recession when the mortgage bubble burst. The developing countries are in a particularly difficult position because remittances and capital inflows decreased, and some investors have begun the withdrawal of capital from these countries. This article presents the impact of the financial crisis on the Serbian economy. Consequently, the fall in growth rates, the rise of unemployment, the increase of public deficit and debt and the decline in capital flows will be observed.

Item Type: Book Section
Additional Information: COBISS.ID=512277346
Uncontrolled Keywords: global financial crisis, growth rates, unemployment, public deficit, public debt, capital flows
Research Department: Macroeconomics
Depositing User: Jelena Banovic
Date Deposited: 16 Dec 2020 13:36
Last Modified: 16 Dec 2020 13:36

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