| Abstract [eng] |
89 pages, 19 tables, 15 pictures, 145 references. The main purpose of the thesis is to identify the primary causes that led to the emergence of the 2007 financial crisis and reveal the opportunities financial institutions had to engage in hedging, speculative, and Ponzi financing schemes. The work consists of three main parts: the analysis of literature, the research and its results, conclusion and recommendations. Literature analysis reviews the fundamental theories of Smith, Minsky, and the Austrian business cycle, examining their relationships with financial crises. Additionally, it investigates the cyclical nature of economics and its connection to financial crises. Literature analysis highlights the principal financial crises and their causes, including a detailed analysis of the Great Recession. Following the literature analysis, the author conducted a study on the implementation of H. Minsky's hypothesis in the period from 2006 to 2021. This research aimed to examine four banks in Lithuania that commenced operations before the start of the study period and continue to operate. The study focused on evaluating these banks through the lens of H. Minsky's hypothesis. By analyzing the financial reports of these banks, the research investigated their ability to engage in hedging, speculative, and Ponzi financing methods. The research undertaken disclosed that all the selected companies could use hedging financing during the study period. Using hedging financing post – crisis allows for better protection against future risks, contributing to economic growth. However, using hedging financing during a crisis is irrational due to the potential decrease in the financial institution's profitability. The study showed that none of the companies under examination could use hedging financing during the crisis. In times of economic recovery, speculative financing can positively impact economic growth, but during economic downturns, it may increase risk and promote the formation of asset bubbles. During the period under study, only three out of the four examined companies could engage in speculative financing due to compliance with conditions. In the economic context, Ponzi financing is illegal and can lead to economic downturns and financial instability. This financing practice is prohibited in all markets. The research determined that the selected companies had the least opportunity to engage in Ponzi financing. In the conclusions and recommendations, the main concepts from the literature analysis and the results of the conducted research are summarized. The author believes that the outcomes of this study could provide useful guidelines for evaluating the capabilities of other financial institutions, especially those that have experienced bankruptcy post – crisis, in their use of hedging, speculative, and Ponzi financing, and in determining the impact of these actions on the economy. |
