Introductory Chapter: Financial Crises

*Stelios N. Markoulis*

## **1. Introduction**

This book aims to present a collection of research papers which are related, in one way or another, to financial crises. The work contained herein ranges from topics such as the sources, origins and political and institutional dynamics of the global financial crisis we had during 2007/09 (GFC) to the liberalisation of economies, macroeconomic development, and the behaviour of interest and exchange rates during periods of political turmoil. Naturally, given its importance and far-reached economic, political and social effects across the globe, the majority of the chapters that will follow are related to the GFC. However, the timing of writing the introduction to this book is such that I strongly believe that the effects (and potential effects) on the financial system and banks of another crisis—a very different one—need to be addressed; I am referring of course to the ongoing economic crisis caused by the COVID-19 pandemic. As such, the prime aim of this chapter is to discuss the effects of this latter crisis on the global economy and the financial sector, in particular, and in doing so provide a 'bridge' between what is discussed in the chapters that follow and what is actually happening around us at this time.

The chapter unfolds as follows: Section 2 discusses the effect of the pandemic on the world economy and the financial system; Section 3 deals with the banking system; and Section 4 concludes.
