Islam, RoumeenNallari, Raj2012-03-192012-03-192010-03-01https://hdl.handle.net/10986/3723This paper provides an overview of the period prior to the recent global crisis, and the policies that were adopted around the world in response to the crisis. It highlights a number of key issues regarding economic and financial policies that governments have faced both globally and nationally. These are related to the management of boom and bust episodes that deserve more attention in policy circles in the future.CC BY 3.0 IGOACCOUNTINGASSET CLASSASSET PRICEASSET PRICESBAILOUTBALANCE SHEETBALANCE SHEETSBANK CREDITBANK DEPOSITSBANK LIQUIDITYBANKING ASSETSBANKING SECTORBANKING SECTORSBANKING SYSTEMBASIS POINTSBOND SPREADSBONDSBOOM ­BUST CYCLESCAPITAL ACCOUNTCAPITAL ACCOUNTSCAPITAL ADEQUACYCAPITAL FLOWSCAPITAL GAINSCAPITAL INFLOWSCAPITAL MARKETSCAPITAL MOBILITYCENTRAL BANKCENTRAL BANKSCOLLATERALCOMMERCIAL BANKSCOMMODITY PRICECOMMODITY PRICESCONSUMER DURABLESCREDIBILITYCREDIT EXPANSIONCREDIT EXPANSIONSCREDIT GROWTHCREDIT MARKETSCREDIT RATINGCREDIT RATING AGENCIESCREDIT RATINGSCREDITORCREDITORSCREDITWORTHY BORROWERSCROSS-BORDER FLOWSCURRENCY COMPOSITIONCURRENCY DEPRECIATIONCURRENT ACCOUNT DEFICITCURRENT ACCOUNT DEFICITSCURRENT ACCOUNT SURPLUSCURRENT ACCOUNT SURPLUSESDEBT COMPOSITIONDEBTORDEFAULT RATESDEFAULTSDEFICITSDEPOSITDEPOSIT INSURANCEDEPOSITSDERIVATIVESDEVALUATIONDEVELOPING COUNTRIESDEVELOPING COUNTRYDISCOUNT RATEDOMESTIC BANKINGDOMESTIC CREDITDOMESTIC LIQUIDITYEMERGING MARKETEMERGING MARKET BONDEMERGING MARKETSEXCHANGE RATEEXCHANGE RATESEXPENDITUREEXPENDITURESEXPORT PERFORMANCEEXPORTERSEXTERNAL BORROWINGFEDERAL RESERVEFINANCIAL ASSETSFINANCIAL CRISESFINANCIAL CRISISFINANCIAL INSTITUTIONSFINANCIAL MARKETFINANCIAL RISKFINANCIAL SECTOR DEVELOPMENTSFINANCIAL STABILITYFINANCIAL SYSTEMFINANCIAL SYSTEMSFISCAL DEFICITFISCAL DEFICITSFISCAL POLICIESFISCAL POLICYFIXED EXCHANGE RATEFIXED EXCHANGE RATESFLEXIBLE EXCHANGE RATEFLOATING RATESFOREIGN BANKFOREIGN BANKSFOREIGN CAPITALFOREIGN CURRENCYFOREIGN CURRENCY DEBTFOREIGN EXCHANGEFOREIGN EXCHANGE TRANSACTIONSGLOBAL ECONOMYGLOBAL MARKETGLOBAL MARKETSGOVERNMENT DEFICITGOVERNMENT EXPENDITURESGOVERNMENT INTERVENTIONGOVERNMENT INVOLVEMENTGOVERNMENT POLICIESGOVERNMENT POLICYGOVERNMENT REGULATIONHOLDINGHOLDINGSHOME EQUITYHOME OWNERSHIPHOMEOWNERSHIPHOUSEHOLD WEALTHIMPLICIT GUARANTEESINCOME GROWTHINFLATIONINFLATIONARY PRESSURESINFORMATION TECHNOLOGYINSTRUMENTINSURANCEINSURANCE COMPANIESINTEREST PAYMENTSINTEREST RATEINTEREST RATE CHANGESINTEREST RATESINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINTERNATIONAL FINANCIAL CRISISINTERNATIONAL FINANCIAL MARKETSINVENTORIESINVESTMENT FUNDSINVESTMENT OPPORTUNITIESINVESTMENT PROJECTSLENDERSLIQUIDITYLOANLOAN GUARANTEEMACROECONOMIC MANAGEMENTMACROECONOMIC POLICIESMACROECONOMIC POLICYMARK TO MARKETMARK TO MARKET ACCOUNTINGMARK-TO- MARKETMARK-TO- MARKET ACCOUNTINGMARKET BORROWERSMARKET INFORMATIONMARKET INSTABILITYMARKET LIQUIDITYMARKET MAKERMARKET PARTICIPANTSMARKET PRICESMARKET SHAREMARKET STRUCTURESMATURITYMATURITY MISMATCHESMATURITY STRUCTUREMONETARY AUTHORITIESMONETARY POLICIESMONETARY POLICYMORAL HAZARDMORTGAGEMORTGAGE INTERESTMORTGAGE LOANSMORTGAGE MARKETSMORTGAGESNATIONAL SAVINGSOIL PRICESOPEN ECONOMIESOUTSTANDING DEBTPOLICY RESPONSEPOLICY RESPONSESPORTFOLIOPORTFOLIO CHOICESPORTFOLIO DIVERSIFICATIONPORTFOLIO INFLOWSPRIVATE CAPITALPRIVATE DEBTPRUDENTIAL REGULATIONPRUDENTIAL REGULATIONSPUBLIC ASSETSPUBLIC DEBTPUBLIC FINANCESPUBLIC SECTOR DEFICITPUBLIC SPENDINGPUSH FACTORSREMITTANCESREPOREPO FACILITYREPO RATERESERVERESERVE REQUIREMENTSRESERVESRETURNSRISK DIVERSIFICATIONRISK FACTORSRISKY COLLATERALSAFETY NETSSAVINGS RATESSECURITIESSHORT TERM INTEREST RATESSTOCK MARKETSTOCK MARKET CAPITALIZATIONSTOCK MARKETSSTOCKSSWAPTAXTAX EXEMPTIONSTAX RATESTRADE FINANCETRADINGTRANSFER PAYMENTSTREASURIESUNDERLYING ASSETSVALUATIONWITHDRAWALWITHDRAWAL OF FUNDSWorld Bank10.1596/1813-9450-5237