Who were the winners and losers in the Financial Crisis of 2008: it depends

Abstract

Purpose – This paper aims to address the question of who gained and who lost in the financial crisis of 2008. Design/methodology/approach – Gains and losses were identified by groups ranging from bankers to homeowners to taxpayers. Findings – Gains and losses are not neatly split by a main street/Wall street dichotomy. Major financial institutions and their chief executive officers made huge gains followed by bigger losses, a substantial portion of which were shared by taxpayers. Homeowners and taxpayers consistently lost. Workers and real estate developers experienced a mixture of gains and losses. Practical implications – Financial legislation is affected by questions of who won and who lost. The complex mixture of gains and losses must be fully grasped if winners and losers are an important consideration in the design of legislation. Originality/value – The detailed analysis and model of winners and losers provide important lessons for legislators and regulators in all countries.