Thesis advisor: Robert Murphy / Thesis advisor: Hiroshi Nakazato / The majority of scholarship surrounding the late 2000s financial crisis explores the enabling factors that contributed to the subprime bubble and caused it to burst. This study’s purpose is to evaluate systemic risk and the near collapse of the financial sector in 2008. Several factors, including derivatives innovation, the rise of a parallel banking industry, and the securitization boom, heightened systemic fragility. I add to financial contagion literature by constructing a stochastic game theory model of institutional decision-making under the auspices of a severe liquidity shortage. Moreover, I will employ this model to evaluate the government’s regulatory program during the crisis. I find that the government’s ad hoc interventions and non-interventions significantly contributed to the atmosphere of uncertainty and exacerbated the crisis’ ill effects. I go on to evaluate the Dodd-Frank Act in light of those conclusions and suggest an alternate method of financial reform. / Thesis (BA) — Boston College, 2011. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: International Studies Honors Program. / Discipline: International Studies.
| Identifer | oai:union.ndltd.org:BOSTON/oai:dlib.bc.edu:bc-ir_102234 |
| Date | January 2011 |
| Creators | Moran, Kevin J. |
| Publisher | Boston College |
| Source Sets | Boston College |
| Language | English |
| Detected Language | English |
| Type | Text, thesis |
| Format | electronic, application/pdf |
| Rights | Copyright is held by the author, with all rights reserved, unless otherwise noted. |
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