Question

Using the concepts of feedback loops, criticality, reflexivity, discuss the lead-up to and onset of a standard banking crisis. How may financial globalization and political incentives influence this process?

Answer 1

The global crisis occurs general due to financial crisis of banking system. A number of countries have banking crisis which have an impact on fiscal crisis on the country. The feedback loop is helpful to avoid banking crisis. The feedback system between the bank and sovereignty risk is helpful to emerge from the banking crisis. The banking system should feedback system among their channel members to avoid any financial mishappening. Bank who have established feedback loop have more return on investment. Closed feedback loop is helpful for bank to deliver the value to the customers. Closed feedback loop is helpful to manage the healthy and trustful relationship among the different channel members o the banking system.