Debt, Financial Fragility, and Systemic Risk

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Oxford University Press, Incorporated, Dec 10, 1992 - Business & Economics - 314 pages
A remarkable feature of the period since 1970 has been the rapid and turbulent change in financing behaviour and financial structure in many advanced countries. Patterns of change have, in turn, often been marked by rising indebtedness, default on loans, and periods of financial instability, whether in the non-financial sectors, the financial sector or both. This book explores, both in theoretical and empirical terms, the nature of the relationships between the underlying phenomena: namely levels and changes in borrowing (debt), vulnerability to default in the corporate and household sectors (financial fragility), and widespread disorder in the financial sector (systemic risk). The book focuses on the wider generality of the phenomena at issue, whereby similar patterns are observable in several countries, but not in others, as well as in the international capital markets themselves. Particular attention is paid to the importance of the nature and evolution of financial structure to the genesis of instability, as well as macroeconomic consequences of fragility and the appropriate policy response. -

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About the author (1992)

E. Philip Davis is Professor of Economics and Finance at Brunel University and Visiting Fellow at the National Institute of Economic and Social Research, London.

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