Abstract
This paper examines the financial crisis of 2007-9 in the UK and US in terms of the financial instability hypothesis (FIH), a theory of boom, bust and financial crises. It is shown that in a similar way to the crises of 1866 and 1987 (Barnes, 2007) the FIH provides an important depiction of the 2007-9 crisis and how it came about. However, it does not recognize: (1) the role of accounting information and how it may contribute to boom and bust and be used to change perceptions and mislead; and (2) the likelihood of fraud and financial swindles, all features of the 2007-9 crisis.
Original language | English |
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Pages (from-to) | 423-437 |
Number of pages | 15 |
Journal | Accounting History |
Volume | 16 |
Issue number | 4 |
DOIs | |
Publication status | Published - Nov 2011 |
Keywords
- big bath accounting
- crash
- fair value accounting
- financial crisis 2007-9
- fraud
- informational asymmetry
- mark to market
- Minsky