An Australian Perspective
Edited by Mohamed Ariff, John H. Farrar and Ahmed M. Khalid
As we entered the third year, 2010, of the Global Financial Crisis, an increasing number of books had appeared with fantastic insights on this epoch-making banking-cum-financial crisis. ‘Do we need another book on this subject?’ is a relevant question the authors of this book should answer. Each of the major books to date sheds light on this crisis from a personalized focus of a writer’s particular perspective. For example, one of the earliest writers, Gillian Tett, did an anthropological diagnosis of a cult of invincibility among the derivative specialists in the investment banking circle, a feeling of originality that led to unfettered innovations that spawned one dangerous, yet untested, linked-financial product originally named BISTRO, which became the CDO (collateralized debt obligation). That invention is the link as to why the crisis spread to the world. Joseph Stiglitz’s book (2009) examines the crisis as a failure of government to regulate the freewheeling financial markets that produced huge incomes for the major titans of the New York and London firms under a epoch of light-touch regulatory framework, engineered by lobbyists. Our book has a different objective. It arose from a multi-profession scrutiny in Australia as to why this event emerged, how it developed into a major world crisis, and what lessons are being learned from it by the G20 nations and individual governments busy putting a work-in-progress to save the world from a repeat of the same. We had practising professionals in regulatory organizations such as central banks, prudential institutions, securities...