Criminology and the Global Financial Crisis
The first overt indications of the impending global financial crisis manifested themselves in August 2007, when BNP Paribas announced it was severing ties with three hedge funds specializing in mortgage debt for American real estate properties. The crisis was exacerbated by the immediate freeze on credit by banks to their customers – and to each other. The crisis came to a head in 2008 when the United States government refused to rescue investment firm Lehman Brothers from financial collapse. Subsequent actions by the American government and by foreign governments, as well as actions taken by commercial enterprises world wide, have been focused on repairing the financial damage to sovereign economies and to individuals thrown out of work – and out of their homes.
It is not unreasonable that everyday individuals failed to comprehend the exotic and opaque financial instruments and transactions employed by companies like Enron and individuals like Bernie Madoff. Powerhouse accounting firm Arthur Andersen was also taken in by Enron, and paid for its error in judgment by being forced to close its doors after nearly a century of operation. Madoff utilized the services of investment firm JP Morgan Chase for years, nearly until the time of his arrest. (more…)