ABSTRACT
Since the demise of the Bretton Woods system, major financial crises have taken place in the US and globally. Financial markets departed from established norms following the collapse of the Breton Woods system in 1973, especially in 19982009. Particularly vulnerable were stock markets and currencies identified with the super-profitable but risky emerging markets. Although systemic crises beset financial markets throughout the 1970s and 1980s, recent occurrences were triggered domestically and then spread globally. The crisis that began in the US housing market in August 2007 brought to light a number of deficiencies in the national financial architecture, especially in the oversight of systematically important institutions, the management of systemic risks and vulnerabilities, and the resolution of financial institutions. A global credit crunch was in the making that could seriously damage the US economy and drag the rest of the world down with it. As hundreds of billions in mortgage-related investments went bad, some of the largest investment banks collapsed or were taken over by other banks.
