Are information and communication technology advances a partial cause of the financial crisis of 2008?
- Structural transformation in the economy caused by ICTs
- Information and communication technologies' domination over the economy
- ICTs and medias versus stock markets
The financial crisis of 2008 started with the subprime mortgage market collapse in the United States of America (U.S.A.) and spread around the world after the bankruptcy of Lehman Brothers due to the interconnection between banks in the globalized financial markets.
During these past years, the financial crisis of 2008 has been attributed to several causes, such as the lack of regulation in the banking sector, or the excessive risk-taking strategy adopted by banks.
However, it must be emphasized that Information and Communication Technologies (ICTs) have also been partially responsible for the financial crisis of 2008. Indeed, ICTs improvements have changed our financial structure, created the questionable price setting mechanism, and caused a dangerous interconnection between financial markets and the medias. This virulent crisis has affected every economic player directly or indirectly.
The welfare of our society depends partially on the stability of our economy; consequently, we are all concerned about this issue. This research offers a new perspective about the financial crisis, by developing a less mediatized and hidden cause. Therefore, in this paper we will investigate whether ICTs advances have been a partial cause of the world financial collapse of 2008.
Firstly, we will explore the changes in the financial markets' functioning caused by the integration of ICTs, in the structural transformation section.
Secondly, we will analyze the price setting mechanism that emerged through ICTs progress, ICTs' domination section.
Thirdly, we will analyze the responsibility of medias and information overload on the economic instability, in the journalistic section.