A Model for the Intervention of a Financial Crisis

Global Journal of Business Research, Vol. 6, No. 2, pp. 41-48, 2012

8 Pages Posted: 6 Jan 2012

Date Written: 2011

Abstract

This paper builds a model for intervention and/or mitigation of a financial crisis by first identifying those conditions precedent to a systemic based financial crisis, and then outlying a process to integrate firm specific and systematic risk into a comprehensive strategic model. A simple application of the model was able to identify significant outliers. For example, using 2006 to 2010 data, Capital One Financial Corporation was identified for intervention from as early as 2006. This corporation received $3.56 billion of the Emergency Economic Stabilization Act Federal bailout funds.

Keywords: systematic risk, financial crisis, banking, reform, failure, regulation, capital, government policy and regulation

JEL Classification: G01, G28

Suggested Citation

Barrow, Janice M., A Model for the Intervention of a Financial Crisis (2011). Global Journal of Business Research, Vol. 6, No. 2, pp. 41-48, 2012. Available at SSRN: https://ssrn.com/abstract=1945853

Janice M. Barrow (Contact Author)

Kennesaw State University ( email )

Executive Education Programs
1000 Chastain Road, MD 2205
Kennesaw, GA 30144
United States

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