ABSTRACT
The global financial crisis, American in origin and triggered by the subprime loan meltdown, has developed into a very serious “once-in-a-century” global financial and economic crisis (Greenspan 2008, amongst others). The severe liquidity crisis and the dysfunction of financial and credit markets, including the interbank market, spawned a loss of confidence and growing fear in credit markets. This led to a rapid across-the-board shrinkage of consumption, production, and employment, including the sharp contraction of the American and global automobile markets. Accompanied by sharply plunging stock prices, the rapid and serious adverse impact of the crisis has spread across the real economy, accelerating a cumulative downward global spiral. As a consequence, the United States and other major industrial nations slipped into negative growth, emerging economies slowed, and the economies of the peripheral countries collapsed. This event gave rise to widespread fears that the 1930s’ Great Depression would soon have a second coming.
