HOW TO MAKE BANKS MORE RESILIENT IN CURRENT GLOBAL FINANCIAL CRISIS
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Authors: Ayesha Muhamid jamal Ansari
Keywords: financial markets, global financial crisis, Resilient, banking system
Abstract: Financial markets have been prone to great volatility since World War 11. The emergence of a global financial system was thus a direct consequence. Ever since, global integrations of financial institutions and expansion of their product and service portfolios have been facilitating the world at large, however, the extended outreach, complexity, and interdependence of these institutions have also led to some expected and sudden economic downturns which have been marked in history as significant crisis eras. The reasons for all these collapses have been clearly understood and penned out. There is ample literature to support the causes of each distress but reaching standardized and permanent solutions to avoid future reoccurrence still remains a challenge on hand. Some clear indicators of control have been signaled through extensive research, however, their applicability to firms exposed to varied externalities along with unanimity of results is still not guaranteed. While dynamics of the global financial systems have significantly changed over time, it is still not easy to identify any set rules that explain how institutions operating under sensitive spans can be made resilient to times of crisis. The scope of this paper is limited to identifying the primary reasons that led to the past financial system downturns and also to amalgamate major factors that may contribute to creating a risk adjusting market in the future. Section 1 defines a global financial system and discusses the role of commercial banks as the most important form of financial institutions. Section 2 explains the most significant financial crisis that has taken place over the last five decades and whose adverse repercussions laid the foundation of having strong regulations for the global financial system till date and also for the future. Section 3 summarizes the main events that led to these crises directly or indirectly. Section 4 lists down major factors that need to be addressed going forward; factors which reflect resilience and capability of withstanding shock in times of financial crossroads.