1 Introduction to Dissertation Topic
The global financial crisis is one of the most impactful events that have taken place in the global economic scenario in the recent past. It was an end result of the faulty securitization and housing loan bubble burst in USA. It has impacted several countries and also destroyed some of the smaller economies.
The paper discussed about the IMF importance and how IMF failed to predict the global financial crisis. The IMF claimed that the global financial crisis was unavoidable; however, my research finding proved otherwise, and that there were indeed sights of assets bubbles which ultimately led to the subprime mortgage crisis.
Large number of studies tried to explore or to figure out clearly the role of IMF in the Asian financial crisis and global financial crisis as it is believe all over the world that IMF made stronger the bitterness of the crisis. During the 1990s and the early 2000s, given the extent of capital flow reversals, and the spread of a behavior pattern emerging market economies faced more than nine major financial crises, the crisis were predominantly driven by capital account problems in contrast to current account factors. After the 1997–1998 crisis, Asian high level development policy setter arrived at an agreement that the then existing international financial architecture — the official operating body that facilitated the consistently even flow of goods, services, capital and helps in maintaining global financial stability with the IMF at its core —was ineffective in working with the crisis-dominated economies who were trying their best to overcome the crisis, and that the IMF even impaired the severity of the crisis. Consequently, many Asian policymakers and observers questioned the credibility of the IMF. (Kaiwai 2010)
It is more important than ever for a reform on the global financial system. The paper will also study on the flaw of the financial system and provide recommendation for the…