This Euromoney book examines the characteristics of different financial systems and markets, including the importance of their legal underpinnings and organisational arrangements, and their role in transmitting financial distress.
Distressed Financial Markets: Navigating the Shoals of Liquidity Risk has been written by Eric D. Cruikshank, a former manager at the International Finance Corporation (IFC) and an economist at the World Bank. During his career at the World Bank and IFC, he was professionally involved in helping resolve several of the country-specific systemic financial crises described in this book. He shares his experience at those institutions spanning three decades in dealing with distressed financial markets in a variety of countries at both the macroeconomic level as well as that of the individual company and financial institution.
The book examines the characteristics of different financial systems and markets, including the importance of their legal underpinnings and organisational arrangements, and their role in transmitting financial distress. It complements this structural focus with brief case studies of a number of country-level financial crises, including the ongoing 2008 credit crunch which began in the United States in the sub-prime mortgage market and is spreading globally and to other segments of the financial markets.
Distressed Financial Markets: Navigating the Shoals of Liquidity Risk will explain to you:
Individual and systemic consequences of financial distress and the closely related phenomenon of impaired financial liquidity
How even countries without well-developed stock markets are not immune to financial crises
Distinctions between financial crisis which originate in the banking sector, the currency markets and those which occur as contemporaneous banking and currency crises, known as "twins"
The importance of the legal and organizational framework in a financial system, particularly in connection with credit and stock markets, in promoting financial stability
The role that structured finance and financial derivatives played since the 1990s in shaping risk management throughout large financial institutions not only in the United States but globally as well
The role of both deregulation and the quest for economies of scale and scope in shaping behemoth financial supermarkets which have emerged as the main players in global financial markets
The main arguments invoked by proponents of opposing views as to whether bad policies or speculators are the main villains causing systemic financial distress, concluding that these two views do not have to be mutually exclusive
How the conventional wisdom regarding sound macroeconomic policy has changed in the light of recent financial crises and the deepening process of globalization
Some of the main lessons of past financial crises which both economic policy makers and investment portfolio managers might want to consider in performing their respective roles
How curbing the excessive mortgaging of our future and restoring the loss of public trust caused by the widespread abrogation of fiduciary responsibility – two trends which figured prominently in the current global financial crisis – represent key challenges to international political and financial leadership going forward.
Managing Editor's Review
The author of our Adding Value in Private Equity book brings you this offering. The book had to be revised just before publication to take into account the current events (the economic crisis). By examining and analysing the characteristics of financial markets and systems of different countries the author suggests how financial systems ad wealth can be protected. This will, of course, be important to economic policy makers and portfolio managers, as well as traders and investors. Case studies are included and make interesting reading and learning. Don’t be put off by the title!
Eric D. Cruikshank is an economist and finance specialist with over 35 years of professional experience in more than 40 countries. He currently heads his own financial advisory firm since retiring from the World Bank Group in 2005 following nearly three decades of service.
During his career in both the World Bank and its affiliate, the International Finance Corporation (IFC), he was professionally involved in helping resolve several of the country specific systemic financial crises described in this book. As a former IFC manager, he had operational oversight responsibilities for staff in connection with new investments, portfolio supervision and asset resolution. He also served as IFC’s nominee on the boards of several banking and financial institutions.
Before joining IFC, he served as a World Bank loan officer, senior economist and deputy resident representative. He was a Canadian International Development Agency (CIDA) adviser in several countries, including serving as the executive project director for an energy and water resource policy and planning team in Nepal.
His earlier career included stints in management consulting and securities analysis. Mr. Cruikshank holds a BA in economics from Mount Allison University and an MBA and MA in economics from York University.
He is the author of Adding Value in Private Equity: Lessons from Mature and Emerging Markets, a 2006 Euromoney Books publication.