Perceived Effectiveness of Responses to the Global Financial Crisis

Abstract

In 2007 an international financial crisis developed and specialised financial products known as credit derivatives appear to have been at the forefront of this crisis.  The purpose of this paper was to determine what solutions financial experts have suggested in controlling the perceived excesses of the credit derivatives industry. These solutions were then critically examined, by interviewing financial experts who deal in credit derivatives, to determine whether these solutions are appropriate and practical and thus produce the intended consequences of the regulations.  The method of the data collection was through the use of semi-structured interviews with financial experts who understand the complex credit derivatives industry. The sample was obtained using the Snowball referencing technique.  The key findings was that most of the six proposals extracted through the literature review process were either not deemed appropriate or practical (or both) and probably should either not be implemented or implemented with caution and forethought.  The key message is that regulations that are implemented without the input of the financial experts whose behaviour the regulations are designed to control are unlikely to succeed.