Causes of Global Financial Crises and Regulation-Failure

Global financial crisis is a sharp, brief, ultracyclical deterioration of all or most of a group of financial indicators – illiquidity, financial insolvencies, rate of returns, asset prices, financial institutions failures, and rush out of the real or long-term financial asset into money. Current global financial crisis includes credit crisis, liquidity crisis and investment crisis. We can identify these causes as follows: real estate bubble, credit overexpansion, overspeculation, financial panic, regulation-failure, and imperfect institutional arrangement of global financial market.