Preface

Financial crises continue to occur from time to time due to several factors affecting the world economy. These crises are becoming even more complex in parallel with rapid technological development, the complexity within financial assets, and contagion effects.

In seven chapters, Financial Crises – Challenges and Solutions examines the financial crises that are taking place globally and proposes possible solutions.

In Chapter 1, "Inequality and the Environment: Impact and Way Forward", Noor Zahirah Mohd Sidek and Jamilah Laidin examine the impact of income inequality on environmental pollution in 120 countries. The authors affirm the relationship between income inequality and environmental pollution for lower-middle- and low-income countries and propose policies to cushion the impact of income inequality to enable more allocation for environmental protection. This includes measures to reduce carbon dioxide (CO2) emissions.

In Chapter 2, "Investors' Greed and Fear: An Event Study of Analyst Recommendations", Qingxia (Jenny) Wang investigates the behaviour of stock returns from investors' reactions to analyst recommendations and finds the existence of abnormal stock returns around analyst recommendation. The author further documents that the magnitudes of abnormal returns are larger for NASDAQ compared to the NYSE.

In Chapter 3, "Currency and Banking Crises: The Origins and How to Identify Them", Heru Rahadyan provides evidence that crises can occur in any good or bad economic conditions, as they can be triggered by rational actions, panics, or contagion effects, and hence they should be mitigated with different policies. The author also proposes measures to identify the crises because once the crises are identified, determinants can be investigated.

In Chapter 4, "Current Challenges to World Financial Stability: To What Extent is the Past a Guide for the Future?", Alex Cukierman discusses current challenges to world financial stability considering lessons that have been learned from past financial crises. The author concludes that although there are similarities between the current and past crises, the current situation nonetheless differs in several important aspects. Further, recent developments in Fintech and the global economic disruptions caused by the war in Ukraine create novel financial vulnerabilities that differ from previous financial crises.

In Chapter 5, "Central Bank Transparency and Speculative Attacks: An Overview and Insights from a Laboratory Experiment in Tunisia", Emna Trabelsi discusses the use of experimental economics as an innovative tool to introduce economic issues in relation to speculative attacks. The author designed a laboratory experiment involving students to test theoretical predictions and proposed policy implications regarding optimal tools for information disclosure.

Finally, in Chapter 6, "Asymmetric TVP-VAR Connectedness Approach: The Case of South Africa", Lethiwe Nzama, Thanda Sithole, and Sezer Bozkus Kahyaoglu assess the connectedness of critical financial variables within the South African context and provide evidence of a connection between commodity prices and precious metals in international markets, as well as examine the exchange rates of the countries supplying the commodities and their risk indicators. The study is crucial for the economic policy of South Africa.

We owe this book's success to the chapter authors whose contributions are very much appreciated and acknowledged. We would also like to thank Karmen Đaleta of IntechOpen for her help throughout the publication process.

> **Razali Haron** IIUM Institute of Islamic Banking and Finance, International Islamic University Malaysia, Kuala Lumpur, Malaysia
