<p><i>Global Financial Systems</i> is an innovative, interdisciplinary text that explores the <i>&#8216;why&#8217;</i> behind global financial stability. Danielsson draws on economic theory, finance, mathematical modelling, risk theory, and policy to posit a coherent and current analysis of the global financial system.</p>

<p>Author&#8217;s acknowledgements</p><p>Publishers&#8217; acknowledgments</p><p>&nbsp;</p><p>Introduction</p><p>&nbsp;</p><p>1 Systemic risk </p><p>1.1 Case study: the 1914 crisis </p><p>1.2 The concept of systemic risk </p><p>1.3 Who creates systemic risk? </p><p>1.4 Fundamental origins of systemic risk</p><p>1.5 Summary</p><p>&nbsp;</p><p>References </p><p>&nbsp;</p><p>2 The Great Depression 1929&#8211;1933 </p><p>2.1 Build-up to a depression </p><p>2.2 The Great Depression </p><p>2.3 Causes of the Great Depression </p><p>2.4 Implications for future policy </p><p>2.5 Summary </p><p>&nbsp;</p><p>3 Endogenous risk</p><p>&nbsp;</p><p>3.1 Millennium Bridge</p><p>3.2 Dual role of prices</p><p>3.3 Risk </p><p>3.4 Dynamic trading strategies </p><p>3.5 Actual and perceived risk and bubbles </p><p>3.6 The LTCM crisis of 1998 </p><p>3.7 Conclusion </p><p>&nbsp;</p><p>4 Liquidity </p><p>&nbsp;</p><p>4.1 The liquidity crisis of 1998</p><p>4.2 What is liquidity? </p><p>4.3 Liquidity models </p><p>4.4 Policy implications </p><p>4.5 Summary </p><p>&nbsp;</p><p>References</p><p>&nbsp;</p><p>5 The central bank </p><p>&nbsp;</p><p>5.1 The origins of central banks </p><p>5.2 Banking supervision </p><p>5.3 Monetary policy </p><p>5.4 Financial stability </p><p>5.5 Bailing out governments</p><p>5.6 Challenges for central banking </p><p>5.7 Summary</p><p>&nbsp;</p><p>Appendix: central bank interest rate </p><p>&nbsp;</p><p>References</p><p>&nbsp;</p><p>6 The Asian Crisis of 1997 and the IMF</p><p>6.1 Building up to a crisis </p><p>6.2 The crisis in individual countries </p><p>6.2.3 South Korea </p><p>6.3 Reasons for the crisis </p><p>6.4 Policy options for the crisis countries</p><p>6.5 Role of the IMF </p><p>6.6 Wider lessons </p><p>6.7 Summary </p><p>&nbsp;</p><p>References</p><p>&nbsp;</p><p>7 Banking crises</p><p>&nbsp;</p><p>7.1 Money and early banking </p><p>7.2 Moral hazard </p><p>7.3 Costs of banking crises </p><p>7.4 Causes of banking crises </p><p>7.5 Bank and banking system failures</p><p>7.6 Summary </p><p>&nbsp;</p><p>References</p><p>&nbsp;</p><p>8 Bank runs and deposit insurance </p><p>&nbsp;</p><p>8.1 Bank runs and crises</p><p>8.2 Modelling deposit insurance</p><p>8.3 Pros and cons of deposit insurance</p><p>8.4 Summary</p><p>&nbsp;</p><p>References</p><p>&nbsp;</p><p>9 Trading and Speculation </p><p>&nbsp;</p><p>9.1 Trading scandals and abuse </p><p>9.2 Trading and risk </p><p>9.3 Trading activities</p><p>9.4 Policy issues </p><p>9.5 Summary </p><p>&nbsp;</p><p>References</p><p>&nbsp;</p><p>Appendix: basic terminology of trading </p><p>&nbsp;</p><p>10 Credit markets </p><p>&nbsp;</p><p>10.1 Market for credit </p><p>10.2 Credit rating agencies </p><p>10.3 Credit models </p><p>10.4 Margins, haircuts and mark&#8211;to&#8211;market</p><p>10.5 Securitisation </p><p>10.6 Summary </p><p>&nbsp;</p><p>11 Currency markets </p><p>&nbsp;</p><p>11.1 Fixed or floating </p><p>11.2 Foreign exchange interventions </p><p>11.2.1 Sterilisation </p><p>11.3 Capital controls </p><p>11.4 Exchange rate regimes </p><p>11.5 Perils of overvaluation </p><p>11.6 Undervaluation and &#8216;currency wars&#8217;</p><p>11.7 Reserve currency </p><p>11.8 Summary </p><p>&nbsp;</p><p>Appendix: exchange rate regimes </p><p>&nbsp;</p><p>References</p><p>&nbsp;</p><p>12 Currency crisis models </p><p>&nbsp;</p><p>12.1 First-generation models </p><p>12.2 The Argentinean crisis </p><p>12.3 Second-generation models </p><p>12.4 European crisis 1992&#8211;1993 </p><p>12.5 Global games currency crisis model </p><p>12.6 Summary </p><p>&nbsp;</p><p>References</p><p>&nbsp;</p><p>13 Financial regulations </p><p>13.1 Banking regulations </p><p>13.2 Bank capital </p><p>13.3 International financial regulations: Basel </p><p>13.4 Summary </p><p>&nbsp;</p><p>Appendix: Value-at-Risk </p><p>&nbsp;</p><p>References</p><p>&nbsp;</p><p>14 Bailouts </p><p>&nbsp;</p><p>14.1 Successful and unsuccessful bailouts </p><p>14.2 The historical origins of lending of last resort (LOLR)</p><p>14.3 What

<p><i>Global Financial Systems</i> is an innovative, interdisciplinary text that explores the <i>&#8216;why&#8217;</i> behind global financial stability. Danielsson draws on economic theory, finance, mathematical modelling, risk theory, and policy to posit a coherent and current analysis of the global financial system.</p><p>&nbsp;</p><p>&quot;Nicely and clearly written for an undergraduate audience&#8230;the book has a fresh perspective that will differentiate it from pre-crisis texts&quot;</p><p>&nbsp;</p><p><i>Professor Goodhart, Professor Emeritus, London School of Economics</i></p><p>&nbsp;</p><p>&quot;Global Financial Systems: Stability and Risk, looks to be an important book&#8230; it will appeal to those interested in regulation as well as those more on the regulatory side.&quot;</p><p>&nbsp;</p><p><i>Professor Caprio, William Brough Professor of Economics at Williams College and Chair, Center for Development Economics</i></p><p>&nbsp;</p><p><b>Jon Danielsson is Director of the&nbsp;Systemic Risk Centre, London School of Economics, and Reader in Finance</b></p><p>&nbsp;</p><p>Visit the author's personal website at&nbsp;<a href="http://www.globalfinancialsystems.org/" target="_blank">http://www.globalfinancialsystems.org/</a>&nbsp;to read two online chapters covering the latest developments.</p>

<ul>
    <li>1 Systemic risk </li>
    <li>2 The Great Depression 1929&ndash;1933 </li>
    <li>3 Endogenous risk </li>
    <li>4 Liquidity </li>
    <li>5 The central bank </li>
    <li>6 The Asian Crisis of 1997 and the IMF </li>
    <li>7 Banking crises </li>
    <li>&nbsp;8 Bank runs and deposit insurance </li>
    <li>9 Trading and Speculation </li>
    <li>10 Credit markets </li>
    <li>&nbsp;11 Currency markets </li>
    <li>&nbsp;12 Currency crisis models </li>
    <li>13 Financial regulations </li>
    <li>14 Bailouts </li>
    <li>15 Dangerous financial instruments </li>
    <li>16 Failures in risk management and regulations before the crisis </li>
    <li>17 The ongoing crisis: 2007&ndash;2009 phase </li>
    <li>18 Ongoing developments in financial regulation </li>
    <li>19 Sovereign debt crises </li>
</ul>

<p><i>Global Financial Systems</i> is an innovative, interdisciplinary text that explores the <i>&lsquo;why&rsquo;</i> behind global financial stability. Danielsson draws on economic theory, finance, mathematical modelling, risk theory, and policy to posit a coherent and current analysis of the global financial system.</p>
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Jon Danielsson

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