Preview

Summary: The 2008 Financial Crisis

Satisfactory Essays
Open Document
Open Document
274 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Summary: The 2008 Financial Crisis
Victoria Ivashina and David Scharfstein (2010) point out that the financial crisis of 2008 affects economy by the decline in new loans in bank area and there are two stresses on bank liquidity led banks to cut lending which are commercial and industrial loans stresses. The data for the writers’ investigation are from Reuters’ DealScan database instead of C＆I - which means commercial and industrial – loans announced by Federal Reserve Board (FRB). The reason maybe that DealScan mainly contains syndicated loans, but the FRB data contain non-syndicated loans as well. Moreover, ignoring the terminal keeper of loans, DealScan notes total loan issuance. However, the FRB date report C＆I loans only. After stating some facts and examining the data from
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Satisfactory Essays

    global finance crisis
    • 466 Words
    • 2 Pages

    global finance crisis

    Stiglitz outlines five lessons to be learned from the GFC. Discuss each one with reference to whether you agree or not.…

    • 466 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    2008 Financial Crisis
    • 2289 Words
    • 10 Pages

    2008 Financial Crisis

    Hank Paulson played a critical role in the financial crisis of 2008. How did Mr. Paulson help create the environment that led up to the financial crisis? What mistakes did he make as Secretary of Treasury when he had to manage the financial crisis of 2008? Do you think Mr. Paulson acted as an unbiased Secretary of the Treasury or did his background at Goldman impact his thinking and his actions?…

    • 2289 Words
    • 10 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Causes Of The 2008 Financial Crisis: Too Big To Fail
    • 249 Words
    • 1 Page

    Causes Of The 2008 Financial Crisis: Too Big To Fail

    Opportunistic politicians used the 2008 financial crisis to pass a 2,300-page bill of growth killing regulations, known as Dodd-Frank. Rather than fixing the causes of the crisis helping Main Street families and businesses, Dodd-Frank enshrined “Too Big to Fail” policies and created a regulatory environment in which many of our community financial institutions are finding themselves “Too Small to Succeed.”…

    • 249 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Good Essays

    Global Banking Crisis
    • 734 Words
    • 3 Pages

    Global Banking Crisis

    Answer the following question in the box below: Identify the lessons learned from the prior global banking crisis? What should be done to prevent such a crisis from happening again?…

    • 734 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Stock Market Crash Of 2007-2008 Research Paper
    • 995 Words
    • 4 Pages

    Stock Market Crash Of 2007-2008 Research Paper

    Mark Twain once said, "History doesn't always repeat itself, but sometimes it does rhyme." In other words, Twain is saying that something very similar to the stock market crash of 1929 could occur again, but nothing will be exactly like it. Although many people say that the financial crisis of 2007-2008 was one of the most devastating economic crises in the last 100 years, the stock market crash of 1929 was far worse because the causes, responses, and effects were more serious and prolonged.…

    • 995 Words
    • 4 Pages
    Good Essays
    Read More
  • Powerful Essays

    The Stock Market Crash Summary
    • 1061 Words
    • 5 Pages

    The Stock Market Crash Summary

    In The Great Crash 1929, John Kenneth Galbraith considers the significance of the stock market crash of 1929 and the depression which followed. In the introduction, which was included for the 1988 release, he discusses the comparisons between the Great Crash of 1929 and the Crash of 1987. He refers to the date October 19, 1987, as "the most devastating day in the history of financial markets at least since the bursting of the South Sea Bubble." He asks, how many economists and investors were observing to see if the safeguards put in place to stop this kind of crash would work and prevent a repeat of 1929? These protections did appear to work and many believed that another crash, such as the Great Crash of 1929, was impossible given the…

    • 1061 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Good Essays

    Financial Crisis of 2008
    • 358 Words
    • 2 Pages

    Financial Crisis of 2008

    There is not one specific reason for the financial crisis, but rather a combination of many events that caused the unusual market collapse of 2008. One explanation can be traced back to 1995 when the Clinton administration attempted to improve the Community Reinvestment Act, which required banks to distribute more loans in lower income areas. If the banks failed to abide by this new law, they would face harsh penalties, such as receiving limits on approvals for mergers and could even be hit with lawsuits. To avoid such severe consequences, banks began to lower their standards for issuing loans and required little documentation of the borrower’s information. These loans were mostly given out in the form of mortgage backed assets and the brokers who approved these loans would bundle the new, risky subprime loans with other prime loans and resell them as investments to other institutions. Most individuals would use one of these new loans to buy a house they could not afford in hopes of refinancing later at a lower rate. It sounded like a good idea at the time, until it eventually caught up with our economy and had a part in the market crash of 2008. (O’Neil)…

    • 358 Words
    • 2 Pages
    Good Essays
    Read More
  • Better Essays

    The Stock Market Crash Summary
    • 1513 Words
    • 7 Pages

    The Stock Market Crash Summary

    Garrison Keillor tells a story in a classic Lake Wobegon episode of his memories of hot summer days working in the garden. He would be outside all day sweating, miserable, and hot, wishing that they could have air conditioning. He also recalls how his mother used to tell him to make the best of his situation because life was what you made it. He took his mother’s words to heart, and passed the time throwing tomatoes at his sister. During the stock market crash of 1929, however, the public and government definitively did not make the best of their situation. In reality, the public overreaction, gigantic loss of money, and failure of the government to react to the stock market crash of 1929 continuously worsened the already falling situation.…

    • 1513 Words
    • 7 Pages
    Better Essays
    Read More
  • Powerful Essays

    2008 Financial Crisis 5page Term Paper
    • 2802 Words
    • 12 Pages

    2008 Financial Crisis 5page Term Paper

    Banks make money through giving out loans to consumers. Home loans are one of the most common type of loan a bank provides customers and its very profitable. However, banks needed a form of collateral when it lends individuals a large sum of money to purchase a home. So if a borrower were to default on their loan, the bank can cover the lost by gaining possession of the house and selling it in the market [1]. However in 1960s, banks could not keep pace with this funding and this led to the development of the mortgage-backed securities (MBS) market [2]. In essence, mortgages were pooled and given to Fanny Mae and Freddie Mac. Fanny Mae and Freddie Mac would securitized the mortgages given to them and sell it as mortgage-backed securities which can be traded in the financial system. This act of pooling the mortgages is called securitization and the name of instruments sold is called mortgage backed securities(MBS).…

    • 2802 Words
    • 12 Pages
    Powerful Essays
    Read More
  • Good Essays

    2008 Crisis
    • 660 Words
    • 3 Pages

    2008 Crisis

    The United States economy is built on credit and combined with the reality that greed played a large part in the events leading up to the Global Financial Crisis (GFC), the United States experienced one of the its worst financial crisis in its history. Easy credit, the housing slump, banks holding risky mortgages and tax regulations all played a significant part in causing the GFC of 2008/09.…

    • 660 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    United States Global Financial Crisis
    • 4485 Words
    • 18 Pages

    United States Global Financial Crisis

    In the years leading up to the crisis, high consumption and low savings rates in the U.S. contributed to significant amounts of foreign money flowing into the U.S. from fast-growing economies in Asia and oil-producing countries. This inflow of funds combined with low U.S. interest rates from 2002-2004 resulted in easy credit conditions, which fueled both housing and credit bubbles. Loans of various types (e.g., mortgage, credit card, and auto) were easy to obtain and consumers assumed an unprecedented debt load. As part of the housing and credit booms, the amount of financial agreements called mortgage-backed securities (MBS), which derive their value from mortgage payments and housing prices, greatly increased. Such financial innovation enabled institutions and investors around the world to invest in the U.S. housing market. As housing prices declined, major global financial institutions that had borrowed and invested heavily in subprime MBS reported significant losses. Defaults and losses on other loan types also increased significantly as the crisis expanded from the housing market to other parts of the economy. Total losses are estimated in the trillions of U.S. dollars globally.…

    • 4485 Words
    • 18 Pages
    Powerful Essays
    Read More
  • Good Essays

    Causes And Consequences Of The 2008 Recession
    • 373 Words
    • 2 Pages

    Causes And Consequences Of The 2008 Recession

    The Recession of 2008 caused widespread panic and distress globally. Trillions of dollars were lost during this time. It was a frightening time for people because they were unsure of what was to come regarding their situations. These losses of money lead to a decrease in consumer spending, which decreased the GDP. This then invoked companies to lower salaries and cut large numbers of their employees. The huge loss of jobs made the unemployment rate skyrocket. All of these consequences of the Recession put many people under stress and lead to an increase in poverty in working class families. The documentary, Inside Job, covered the causes and consequences of the Recession in great depth. There are many underlying causes that lead to…

    • 373 Words
    • 2 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Banking Crisis 2008
    • 252 Words
    • 2 Pages

    Banking Crisis 2008

    1) In the 1970’s Gold backed money was seen as the system one must follow until John Law believed that confidence was the basis of credit. Gold backed money was clearly a more stable option for the bank but to create more flow in the lending sector confidence backed money was seen as the future. I believe that confidence is better than gold because it creates more growth in numerous sectors although tighter regulation was needed for it to be a success in 1972.…

    • 252 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    The Subprime Crisis and Its Impact in the Financial Sector
    • 10920 Words
    • 44 Pages

    The Subprime Crisis and Its Impact in the Financial Sector

    Given the subprime mortgage crisis caused a rapid inflation and devaluation of house pricing and…

    • 10920 Words
    • 44 Pages
    Powerful Essays
    Read More
  • Good Essays

    The Financial Crisis
    • 3376 Words
    • 14 Pages

    The Financial Crisis

    the southern United States, addressed a group of distinguished alumni in New York City. Many…

    • 3376 Words
    • 14 Pages
    Good Essays
    Read More

Related Topics