Subject category:
Finance, Accounting and Control
Published by:
IBS Research Center
Length: 10 pages
Data source: Published sources
Topics:
US financial market; Credit led consumerism; Reconstruction Finance Corporation (RFC); Glass-Steagall Act; Federal Deposit Insurance Corporation (FDIC); Securities Act and Security Exchange Act; Originate and hold model; Originate and distribute model; Primary mortgage market; Secondary mortgage market; Securitisation and resecuritisation; Assets backed commercial paper (ABCP); Special purpose vehicle (SPV), structure investment vehicle (SIV) and hedge funds; Mortgage backed securities (MBS); Collateralised debt obligation (CDO); Collateralised loan obligation (CLO); Credit default swap (CDS); Debt bubble and housing bubble; Alt-A borrower and sub-prime borrower; Adjusted rate mortgage; Over leverage; Market liquidity
Share a link:
https://casecent.re/p/91583
Write a review
|
No reviews for this item
This product has not been used yet
Abstract
2008 witnessed a catastrophe in the US financial market. Investment banks like Lehman Brothers went bankrupt, insurance companies like AIG had to be bailed out by the Federal Reserve, and the gloom shrouded the whole globe. Analysts attributed the catastrophe to the abundant use of financial derivatives. Many of them started quoting Warren Buffet's famous statement on derivatives 'Derivatives were time bombs both for the parties that deal in them and economic system'. But was the derivative the only reason for such a large scale financial disaster? Was it a consequence of the huge dependence on market dynamics? Was capitalism at a crossroads? Or did the US forget the lesson of the great depression and the subsequent legislations that Roosevelt introduced? Was it merely a consequence of proper check valves lacking in the US financial sector?
About
Abstract
2008 witnessed a catastrophe in the US financial market. Investment banks like Lehman Brothers went bankrupt, insurance companies like AIG had to be bailed out by the Federal Reserve, and the gloom shrouded the whole globe. Analysts attributed the catastrophe to the abundant use of financial derivatives. Many of them started quoting Warren Buffet's famous statement on derivatives 'Derivatives were time bombs both for the parties that deal in them and economic system'. But was the derivative the only reason for such a large scale financial disaster? Was it a consequence of the huge dependence on market dynamics? Was capitalism at a crossroads? Or did the US forget the lesson of the great depression and the subsequent legislations that Roosevelt introduced? Was it merely a consequence of proper check valves lacking in the US financial sector?