Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/274767 
Authors: 
Year of Publication: 
2022
Citation: 
[Journal:] Journal of Risk and Financial Management [ISSN:] 1911-8074 [Volume:] 15 [Issue:] 6 [Article No.:] 245 [Year:] 2022 [Pages:] 1-61
Publisher: 
MDPI, Basel
Abstract: 
This article re-examines key explanations of the Global Financial Crisis-product complexity, behavioural biases in decision making, systemic risk, and regulatory arbitrage and capture-and finds a common underlying cause, namely gaming by personnel at all levels in the banking sector and its regulators. This has enabled banks to use highly leveraged, maturity-mismatched investment strategies, which were designed so that the banks retained the upside rewards, but transferred the downside risks to taxpayers, leading to the privatization of profits and the socialization of losses-behaviour that has been described as "banksterism". Although governments have introduced some significant mitigatory measures, they will not be effective in preventing future financial crises, because they do not and, indeed, cannot provide the appropriate incentives to end the Great Game between bankers and taxpayers, which would involve making bankers, rather than taxpayers, personally liable for losses.
Subjects: 
behavioural biases
gaming
Global Financial Crisis
product complexity
regulatory arbitrage and capture
shadow banking
systemic risk
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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