ABSTRACT
The Great Recession, as the current global economic crisis is known (see for instance Borio 2009), is not just another financial crisis. The crisis has led to the collapse of financial institutions, seriously affected the functioning of global financial markets and also has had significant real effects. Some of these are the collapse of investment, the contraction of GDP and the rise of unemployment, particularly in developed countries, and the large reduction of trade and industrial production worldwide (Eichengreen and O'Rourke 2009). More important, in contrast to previous financial crises which principally affected the developing world, is the fact that this crisis started in industrialized countries and has been the consequence of an explosive combination of lax financial regulations, the development of new (and risky) financial instruments and the rise of households’ indebtedness to preserve their standards of livings in a more unequal world (Blankenburg and Palma 2009; Serino and Kiper; 2009).
