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“In 2008-2009, the world economy retrenched in the wake of a global financial crisis. (The Great...

“In 2008-2009, the world economy retrenched in the wake of a global financial crisis. (The Great Recession) Did the globalization of capital markets contribute to this crisis? If so, what can be done to stop global financial contagion in the future?... NO Easy answers…check out what the G20 is up to. NOTE: This crisis happened 12 years, so the best answers will not only discuss what the G20 did at the time but research what it has been doing since this global crisis.

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Answer #1

Yes, the globalization of capital markets has contributed to this crisis.
There was rebalancing done by institutional and other large inventors when there was a crisis in one market. This contributed to this problem.
Against the crisis, G20 started reshaping global finance governance by implementing macro-prudential policies, developing strict rules on the "too big to fail" problem, increasing the lending capacity of the International Monetary Fund (IMF), and collecting richer information on the shadow banking system. The G-20 has also played a crucial role in strengthening the international financial regulatory system, including better coordination across countries. This has been carried on since then.

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