Luīze Liene Linde

Reading assignment 1.

Annotation.
The article under the headline “The Forgotten History of the Financial Crisis : What the
World Should Have Learned in 2008 ” published in Foreign Affairs on the September/October
2018 issue discusses the global financial crisis of 2008, the varied opinions of the transatlantic
countries on the cause of it and the consequences of such economic recession. The article studies
the severe affects the crisis left on financial situation worldwide, compares to current economic
ties between transatlantic coutries and deduces the possibility of a succesful global crisis
aversion in modern days.

Opinion.
Without a doubt, society will always have different opinions on a controversial topic, but
I believe that every opinion has its own truth. More precisely, as mentioned in the article, the
United States and Europe’s differing opinions on the global financial crisis. People will always
find someone to blame. In this situation European Commission blamed Americans, but the
United States blamed their own government. The truth is that all the transatlantic countries had
very integrated international banking system which had its flaws, thus leading to collapsing of
economic institutions and banks and overall economic recession.

In my opinion, the provided solution from the United States, which was offering
liquidity swap lines to foreign central banks in debt, was smart and genius at the same time,
because not only they slowly managed to diminish the crisis, but they also strengthened their
diplomatic ties with the foreign countries, as well as strengthening the status of US dollar as the
world’s leading currency.

Adding to what I said earlier, I find it surprising that Europe doesn’t want to admit that it
is partly at fault of the financial crisis. It’s because they couldn’t overlook and control their own
economy that it became too dependent on the economical processes that happened in the United
States. I believe that in case of a similar modern-day crisis this ignorance from Europe would
result in low possibility of successful crisis management.

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List of terms :
1. Assessment - the act of judging or deciding the amount, value, quality, or importance of
something, or the judgment or decision that is made.
2. Contagion - the situation in which feelings, ideas, or problems spread from one place to
another.
3. Inept - not skilled or effective.
4. Implosion - a situation in which something fails suddenly and completely
5. Foreclosure - the action of taking back property that
was bought with borrowed money because the money was not being paid back
as formally agreed, or an example of this.
6. Consensus – a generally accepted opinion or decision among a group of people
7. Contentious - causing , involving, or likely to cause disagreement and argument
8. Denominated – used to describe shares, bonds, etc. that are in a particular currency
9. Exchequer - the government department that receives and gives out public money, in the
UK and some other countries.
10. Heterodox - (of beliefs, ideas, or activities) different to
and opposing generally accepted beliefs or standards.
11. Mitigating - making something less harmful, unpleasant, or bad
12. Volatility - the quality or state of
being likely to change suddenly, especially by becoming worse.
13. Asset-backed - relating to an investment with income from particular assets,
for example payments on home loans.
14. Ramifications - the possible results of an action.
15. (Real estate) Busts
16. Precipitated - to make something happen suddenly or sooner than expected.
17. Debacle - a complete failure, especially because of bad planning and organization.
18. Ailing - experiencing difficulty and problems.
19. Inaugural - An inaugural event is the first in a series of planned events.
20. Draconian - Draconian laws, government actions, etc. are extremely severe, or
go further than what is right or necessary.

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21. Collateral - valuable property owned by someone who wants to borrow money, that

they agree will become the property of the company or person who lends the money if
the debt is not paid back.
22. Conduits - a way of connecting two places.
23. Depictions - the way that something is represented or shown.
24. Rampant - (of something bad) getting worse quickly and in an uncontrolled way.
25. Harbinger - a person or thing that shows that something is going
to happen soon, especially something bad.
26. Leeway - freedom to act within particular limits.

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Bibliography.
1. Adam Tooze (2018), The Forgotten History of the Financial Crisis : What the World
Should Have Learned in 2008, Foreign Affairs, Vol.7, Nr. 5.(September/October),
https://www.foreignaffairs.com/articles/world/2018-08-13/forgotten-history-
financial-crisis. Or http://datubazes.lanet.lv:3536/ehost/pdfviewer/pdfviewer?
vid=8&sid=99efd9a3-4220-4268-99d0-b6f9a1af5af6%40pdc-v-sessmgr01
2. https://dictionary.cambridge.org/dictionary/english/.