Global Financial Crisis

Global Financial Crisis Deepak Prakash Bhatt, PhD

Criticism Joseph E. Stiglitz- Senior Vice-President of WBChairperson of Council of Economic AdvisorsRaised discontents about world bank policiesCritical views about globalization, free market

fundamentalists and IMFRecipient of the Nobel Memorial Prize in

Economic Sciences-2001

….Price of Inequality: How Today’s Divided

Society Endangers our Future Higher taxes on richMillions are poor so that reduce the

corporate welfare Freefall: Free Markets and Sinking of the

Global EconomyTake lessons form Asian Crisis of 90’sNeed sense of balance between market and

the state, between individualism and community and man and nature

….The Three Trillion Dollar War: The True Cost of

Iraq ConflictThe war highly expensive than budget 50

bil. allocated by White HouseHuman death tolls are not accounted

Stability with Growth: Macroeconomics, Liberalization and Development

Global Financial Crisis Started to show its effects in the middle of 2007 and into

2008 Also known as the Global Financial Crisis-considered by

many economists the worst financial crisis since the Great Depression of the 1930s

It resulted in the threat of total collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world

In many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment

….The crisis played a significant role in the failure of

key businesses, declines in consumer wealth estimated in trillions of U.S. dollars

Downturn in economic activity leading to the 2012World stock markets have fallenLarge financial institutions have collapsed or been

bought outNations have had to come up with rescue

packages to bail out their financial systems

….Following a period of economic boom, a

financial bubble—global in scope—burstA collapse of the US sub-prime mortgage or

credit quality of marketReversal of the housing boom in other

industrial-ized economies have had a ripple effect around the world

Weaknesses in the global financial system have surfaced

….Some financial products and instruments

have become so complex and twistedRole of the rating agencies Loans were seen as security-SecuritizationSubprime Mortgage Collapsed because of

interlinked investments

….The bursting of the U.S. housing bubblePeaked in 2006 caused the values of

securities tied to U.S. real estate pricingThe financial crisis was triggered by a

complex interplay of policies that encouraged home ownership, providing easier access to loans

Lack of adequate capital holdings from banks and insurance companies

….Theory-housing prices would continue to

escalateQuestionable trading practices on behalf of

both buyers and sellersCompensation structures that prioritize short-

term deal flow over long-term value creation

International Security Traditional Approach-State centric and military

concerns International security consists of the measures

taken by nations and Intl orgs to ensure survival and security through military action and diplomatic agreements

Balance of PowerInterlinked-Intl and national security End of WWII-emerge as sub-field of IR-Peace, Security

and Strategic Studies

….State-centric notion of security has been

challenged by more holistic approaches to security

Basic threats to human safety are paradigms that include-Cooperative SecurityComprehensive Security Collective SecurityHuman Security

….Walter Lippmann Arnold Wolfers Barry Buzan Mahbub-ul HaqNayef Al-Rodhan

Newer Dimensions Zero sum to multi sum security Global security

Human Security Environmental Security National Security Transnational Security Transcultural security

Global security and the security of any state or culture cannot be achieved without good governance at all levels that guarantees security through justice for all individuals, states, and cultures

Environmental Problems; Climate Change and its Implication

Significant and lasting change in the weather patterns over periods ranging from decades to millions of years

It may be a change in average weather conditions

In the distribution of weather around the average conditions

….Factors-

Biotic processes-living things that shapes ecosystem Variations in solar radiation received by Earth Plate tectonics- large scale motions of earth Volcanic eruptions-leaves gases Ocean Variability-seafloor spreading ‘Sun’ is the predominant source for energy input to the

Earth Both long- and short-term variations in solar intensity

Certain human activities have also been identified as significant causes of recent climate change, often referred to as global warming

Environmental Security Important field of international relations and

international developmentThreats by environmental events and trends

to individuals, communities, international institutions or organizations or nations

Focus on the impact of human conflict and IR on the environment, or on how environmental problems cross state borders

….Environmental security –

Preventing or responding to environmentally caused conflicts

Preventing or repairing military damage to the environment

Protecting the environment due to its inherent moral value

It considers the abilities of individuals, communities or nations to cope with environmental risks changes or conflicts, or limited natural resources

….Copenhagen School-regional, global and

securitization Relationship between security concerns such as

armed conflict and the natural environment Human activity impacts- CO2 emissions

Regional and global climatic changes in agricultural output

Food shortage-political debate, ethnic tension and civil unrest

International Development ID projects may aim to improve aspects of

environmental security-food or water securityMDG 7 about environmental sustainability show

international priorities for environmental securitySecurity of fisheries on which many people

depend for food

….This energy is distributed around the globe by

WindsNuclear CoalWater Ocean currentsFossil ThermalPetroleum Changes in greenhouse gas concentrations

….Factors that can shape climate are called climate

forcing or "forcing mechanisms”These include processes such as variations in

solar radiation, variations in the Earth's orbit, mountain-building and continental drift and changes in greenhouse gas concentrations

There are a variety of climate change feedbacks that can either amplify or diminish the initial forcing

Books Security and Climate Change: International Relations and the Limits of

Realism by Mark Lacy, Routledge (2007) A Political Theory of Climate Change by Michael S. Northcott, Wm. B.

Eerdmans Publishing (2013) Climate Cataclysm: The Foreign Policy and National Security

Implication of Climate Change by Kurt M. Campbell, Brookings Institution Press (2008)

The Climate Crisis: An Introductory Guide to Climate Change by David Archer, Stefan Rahmstorf, Cambridege University Press (2010)

Climate Change: Picturing the science by Gavin Schmidt, Joshuna Wolfe, Jeffrey D. Sachs, W.W. Norton & Company (2009)

Climate Change: What the Science Tells Us by Charles Fletcher, Wiley (2013)