This paper contains an analysis of factors, both internal and external, that caused the financial crisis in Russia in 1988.
The main argument of the paper is that the main causes of the crisis originated from inside. The
monetary system that the Russian
government created after the fall of the USSR failed to provide a stable channel for the implementation of an adequate monetary policy. The paper shows that the banking system was ill-designed and corrupt, mainly serving as a channel for government funds to favored industries. Finally, the paper shows that the extreme usage of government debt (often for the personal benefit of the Russian officials) was the factor that shut the whole economy down. Bonds were printed like paper, which is unsustainable even in the short-run. Table of Contents: A Self-made Crisis Fake Monetary System The Banks that Weren't Russian FIGs A Pyramid of Bonds The Fall of the Babylon The Responsibility Works Cited