Global Financial Crisis in 21st Century: A Brief Analysis of Stock Exchanges

Abstract

The objective of the study is to classify the historical financial crisis parameters to act as predictors for the beginning of the 21stcentury (data considered from January 2001 to April 2020), grasp the capital market dynamics of the financial system across the globe and the body of know-how. The change in the logarithmic gap in stock indexes determines daily stock market returns dependent on individual indices in the developed and emerging countries. Using regression estimation, the ADF root test was carried out. Descriptive statistical analysis, log return graphics, and lowest return on selected exchanges during the 21st century (data considered from January 2001 to April 2020). This paper identifies a general trend of boom and bust after analyzing the problem of contagion from the initial euphoria to the point of affliction. Based on historical experience, this paper describes the history of financial crises. It defines crisis concepts, banks, debt, currencies, and other types, such as depression and abrupt stoppages. During the 21st century (data considered from January 2001 to April 2020), the global financial sector has undergone unprecedented development and major systemic reform that contributed to financial market globalization. The limitations of the paper are time frame and limited exchanges taken into considerations. This paper analyses the macro factor of the crisis where the stock exchanges from developing and developing economies taken into consideration. Investors from around the world can identify the crisis period and consider their future investment patterns. The globalization of financial markets has accentuated the accelerated cross-border movement of money, and intensified the infectious effects of the financial crisis, with large impacts on domestic and foreign diffusion of financial policies.