Abstract
There has been much debate about the link between global imbalances and the financial crisis of 2007–2008. The most recent contributions show that the recent global financial crisis was preceded not so much by a widening of current account imbalances as by a pronounced increase in gross capital flows between countries. In particular, between 2002 and 2007 several banks from major European countries dramatically increased their long-term assets in dollars, in particular as asset-backed securities (ABS), by stocking up on short-term funding on the interbank market or the money market.
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© 2014 Pierluigi Morelli, Giovanni B. Pittaluga and Elena Seghezza
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Morelli, P., Pittaluga, G.B., Seghezza, E. (2014). Gross Imbalances, Liquidity Shortage and the Role of the Federal Reserve. In: Lindblom, T., Sjögren, S., Willesson, M. (eds) Financial Systems, Markets and Institutional Changes. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, London. https://doi.org/10.1057/9781137413598_3
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DOI: https://doi.org/10.1057/9781137413598_3
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