| By: |
Sergio Lagoa (Instituto Universitário de Lisboa (ISCTE-IUL), DINAMIA’CET-IUL);
Emanuel Leao (Instituto Universitário de Lisboa (ISCTE-IUL), DINAMIA’CET-IUL);
Ricardo Barradas (Instituto Universitário de Lisboa (ISCTE-IUL), DINAMIA’CET-IUL) |
| Abstract: |
Over time the financial sector has gained greater relevance in the economy, a
phenomenon that some call financialisation. Contrary to the mainstream view,
financialisation literature emphasises that risk management by financial
corporations will not be socially efficient in a context of deregulated
markets and will ultimately lead to an increase of aggregate risk and crises.
To assess the validity of such claim, in this paper we review the literature
on risk management during the Subprime crisis. These failures fall into three
categories: technique and methodology, corporate governance and strategy, and
regulation and external factors. These failures can be interpreted in the
light of the financialisation perspective, which is therefore a valuable
approach when addressing regulatory changes in the financial system. |
| Keywords: |
risk management, financial crisis, financialisation. |
| JEL: |
G01 G18 G21 G28 |
| URL: |
http://d.repec.org/n?u=RePEc:fes:wpaper:wpaper37&r=cfn |