Economics of Money, Banking and Financial Markets

            Analyzing the causes of the global financial crisis and its characteristic manifestations, it is clear that the deepening of globalization processes and a high level of internationalization of the world economy led to a significant loss of national financial systems and slowed down their development. Financial crises tend to lead to an imbalance, recession, default, collapse of stock markets and the political tensions in the financial and economic life, causing panic among banking depositors, rising interest rates, and thus the risk to investors. And most importantly – they are characterized by the collapse of many investment institutions, as they disturb the equilibrium of the entire national financial system.
             The global financial crisis of 2007-2009 was the most destructive phenomenon, which adversely affected the development of the international financial system in the period of globalization. This crisis has acquired the status of global, since it began in one country (the US) and gradually spread to other countries, regions, continents, eventually all the world. According to Bloomberg the financial crisis in 2007-2009 caused damage to the banks shareholders of over $ 690 billion US dollars. For comparison, the total losses in the banking sector throughout the world during the crisis in the early 1990s amounted to 200 billion US dollars. The current crisis is also characterized by the fall of the total value of the national wealth of the world: from 107 trillion down to 50 trillion US dollars.
             Given the "sizzling" and devastating character of the financial crisis, many call the one from 2007-2009 a crisis of confidence because it aggravated the problem of creating a new reliable low-risk financial investment instruments, the occurrence of which is still considered impossible. In our opinion, it would be appropriate to define the crisis of 2007-2009 as the first crisis of globalization, because it covered the entire international financial system and contributed to the destruction of many powerful investment institutions because of the falling stock prices on world stock markets.