The IMF reported that the global financial crisis was facilitated in an environment in which financial institutions and investors were overly optimistic in terms of risk and asset price. Although “overall banking system leverage” was mostly evident in the United States, the United Kingdom, Germany, and Switzerland, China also exhibited such trends but on a lesser note. The three miscalculations of those who were responsible for the world's financial markets include how officials were reluctant to intervene even when evidence of danger was already available, the pursuance of unregulated reforms, and the misinterpretation of growth effects. This chapter summarizes the important points made in the previous chapters and illustrates how the combination of complacency and ignorance further facilitated the occurrence of the global financial crisis in terms of reforms.
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