steve's introduction

Most economists would agree that due to the credit crunch, global markets are facing potential collapse (Stiglitz, 2008; Monbiot, 2007). As we know, our current recession began in the USA where banks got into the habit of granting mortgages to lenders unable to pay them back. This created a liquidity crisis in the country which banks and government were unable to resolve, and soon these economic difficulties spread to the rest of the world (BBC News, 2008).On one hand, some people argue
that even though today the economy does not seem very well, many people do their business and finances highly efficiently and effectively for the last 20 years with using the benefits of globalization. On the other hand, however, different thinkers have taken almost completely opposite views , pointed out the current issues and continue with, if it was not global markets there would not be the financial crises today. In this essay, I will argue that we have to radically assess the 20th Century philosophy of free trade and globalisation due to the failures we've experienced recently in global markets. I will begin by looking at how this philosophy was based on an erroneous logic and then go on to describe the ways in which it has set us back with regard to financial efficiency and growth. I will then go on to discuss the ways in which I think this current crisis will affect future research in my subject area International Banking and Finance.