Current Economic and Financial Crisis – New Issues or Returning to the Old Problems? Paradigms, Causes, Effects and Solutions Adopted

• Published in: Theoretical and applied economics Vol. XVIII; no. 1
• Main Authors: Felix TOTIR, Ingrid-Mihaela DRAGOTĂ
• Format: Journal Article
• Language: English
• Published: General Association of Economists from Romania 01.01.2011
• Subjects: financial crisis; financial crisis paradigms; globalization
• ISSN: 1841-8678; 1844-0029

At the ideological level, the current crisis, as the others in history, has triggered an intellectual debate among several applicable ideas: ultra-liberal theory of the "invisible hand" of Adam Smith, Keynes’s theory of state interventionism and even neo-Marxist theories. Globalization, with all its core components, generates a chain reaction when the phenomenon occurs, either positive or negative. The origin of the current financial crisis should be sought in the effects of massive cross-border capital flows and the use of more complex derivatives. Reaching the saturation of the three engines of economic growth worldwide in the period after the collapse of the socialist bloc is another important cause of all the failures that currently exist worldwide. Acquisition of toxic assets from bank balance sheets, their recapitalization and takeover by the state, but also the reinforcement of the prudential supervision of capitalization, liquidity and risk management system, improved transparency and speed the process of evaluating or reinforcing authorities’ response to risk, can be considered short or long term anti-crisis measures, as appropriate.