chapter  15
18 Pages

International financial diplomacy and the crisis

ByStephen Pickford

The economic and financial crisis of 2007-2009 resulted in the most severe global peacetime recession since the 1930s. Wholesale financial markets dried up; banks faced a liquidity crisis, which then turned into a solvency crisis for many; and many countries faced a credit crunch, as well as the costs of bailing out financial institutions. Global output actually declined in 2009, a very rare event in peacetime; and advanced economy output fell by over 3 per cent.