Shah notes in the article that the global financial crisis started in 2007; Shah also notes that the global financial crisis led to the closure of many financial institutions around the world (Shah, 2013).
According to this article, following the global financial crisis, various governments had to bail out various financial institutions that were on the verge of collapse. Shah, however, notes that, although various governments bailed out various financial institutions that were at risk of closure, the problem of global financial crisis was mainly caused by the very financial institutions that sought bail out from the government. A critical view of this point by Shah shows that the financial institutions were indeed mainly to blame for the global financial crisis. This is because the lax lending standards of many financial institutions made many people unable to access loans and mortgages, leading to serious financial crisis. Fratianni and Marchionne support this view in their article “The Role of Banks in the Subprime Financial Crisis”. According to the two authors, it is the exorbitant lending rates of many financial institutions that mainly caused the global financial crises, besides the imbalances in international trade (Ratianni $ Marchionne, 2009).
In this article, Shah claims that the global financial crisis did not affect the financial institutions only or only the rich nations, but it affected all individuals of every nation. This is because, according to Shah, the effects of global financial crisis trickle down to all people and affect individual’s livelihood.
One of the main arguments advanced in this article is that, the financial crisis could have been avoided if financial institutions had adopted the current economic models. According to Shah, the global financial crisis has been caused by people’s negligence, especially the government failure to effectively control financial institutions. Shah argues in the article that states have