Publication: The demise of the US investment banking from a Minskian perspective
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2021
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Instituto Complutense de Estudios Internacionales (ICEI)
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This research analyses the causes behind the de-facto demise of the US firms dedicating their activity exclusively to securities business, in the wake of the financial crisis of 2008, focusing on the firms´ risk mismanagement and bad lending practices, that increased fragility and risk exposures in the US securities sector.
These practices emerged when leading firms became gradually convinced of the goodness of financial instruments of their own design, as they engaged in proprietary trading activities and trading of financial products with residual liquidity, increasingly shifting their use from hedge to speculative purposes.
In this way, leading financial operators able to take unrestricted risk and highly leveraged positions in unregulated markets are the cause behind volatility in asset prices, and they are ultimately responsible of the cyclical boom and bust dynamics of the market-based economy.
Esta investigación analiza las causas detrás de la desaparición de los bancos que dedicaban su actividad exclusivamente a la banca de inversión de EEUU, a raíz de la crisis financiera de 2008, centrándose en la mala gestión del riesgo y las malas prácticas crediticias de dichas empresas, que aumentaron la fragilidad y la exposición al riesgo en el sector. Dichas prácticas surgieron cuando los principales bancos con actividad en títulos de valores se convencieron gradualmente de la bondad de los instrumentos financieros de su propio diseño, y comenzaron a dedicar recursos y parte de su actividad al trading por cuenta propia, al negocio de productos financieros con liquidez residual, e instrumentos cuyo uso cambió de cobertura a fines especulativos. De esta forma, los principales operadores financieros capaces de asumir riesgos irrestrictos y posiciones altamente apalancadas en mercados no regulados son la causa de la volatilidad en los precios de los activos y, en última instancia, los responsables de los auges y la caídas cíclicas propias de la economía de mercado.
Esta investigación analiza las causas detrás de la desaparición de los bancos que dedicaban su actividad exclusivamente a la banca de inversión de EEUU, a raíz de la crisis financiera de 2008, centrándose en la mala gestión del riesgo y las malas prácticas crediticias de dichas empresas, que aumentaron la fragilidad y la exposición al riesgo en el sector. Dichas prácticas surgieron cuando los principales bancos con actividad en títulos de valores se convencieron gradualmente de la bondad de los instrumentos financieros de su propio diseño, y comenzaron a dedicar recursos y parte de su actividad al trading por cuenta propia, al negocio de productos financieros con liquidez residual, e instrumentos cuyo uso cambió de cobertura a fines especulativos. De esta forma, los principales operadores financieros capaces de asumir riesgos irrestrictos y posiciones altamente apalancadas en mercados no regulados son la causa de la volatilidad en los precios de los activos y, en última instancia, los responsables de los auges y la caídas cíclicas propias de la economía de mercado.
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