BANK LENDING RATES IN ZAMBIA The first thing that must be done in order to mitigating the problem of high bank lending rates is by reducing the gap between interest rate on Treasury bills and inflation. It must be borne in mind that the gap must not be reduced by increasing the level of inflation but by reducing the level of interest on TBs so that it comes close to that of inflation. The target will be to reduce the correlation of the relationship between interest rates on TBs and lending rates
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ELECTRONIC ASSIGNMENT COVERSHEET Student Number 32626336 Surname Bajaj Given name Jiwan Email jiwansbajaj@gmail.com Unit Code BUS290 Unit name Financial Markets and Institutions Enrolment mode External Date 13 March 2015 Assignment number Option (b) Assignment name Major causes of GFC and the ongoing economic impacts Tutor Lester Chan Student’s Declaration: Except where indicated‚ the work I am submitting in this assignment is my own work and has not been submitted for assessment in another
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Bibliography: ⑵Yuliya Demyanyk and Otto Van Hemert. Understanding the subprime mortgage crisis. Oxford Journals. 2009 ⑶Michael Lim Mah-Hui ⑷Jay Barney. Firm Resources and Sustained Competitive Advantage‚ 1991. ⑻Stephen Lendman. Impending Economic Crisis: The Myth that Markets Get It Right and Operate Efficiently. Global Research
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This incentivised Fannie Mae and Freddie Mac‚ who by 2005 had produced trillions worth of loans‚ many of which were sub-prime and without down payments of their house. The market assumed houses would continue to rise in value‚ as minimal lending standards had pushed prices up by increasing the demand for homes. As the industry had observed this deregulation and opportunity in the market‚ private lenders seized the opportunity and entered the market with the majority of sub-prime mortgages
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by the federal government to bring us out of this recession. The cause of this mortgage crisis‚ according to many leading financial experts‚ was subprime loans and adjustable rate mortgages. These loans encouraged borrowers to assume unaffordable mortgages with the belief they could refinance later with a lower rate. Since 1998 the number of subprime loans borrowers bought homes with was well over seven million. One million of these homes are being lost to foreclosure because homeowners could no
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Financial Crisis of 2008 and its impact on Pakistan Following the financial crisis that broke in the US and other Western economies in late 2008‚ there is now serious concern about its impact on the developing countries including Pakistan. No doubt about that there are particular countries that will be adversely affected‚ there will also be countries that may be less affected‚ may avoid recession‚ and may recover sooner than expected. Although current Pakistan’s Economics downturn has been caused
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CORPORATE FINANCE 307 LITERATURE REVIEW Student Name / ID: Chay Yu Xi 15907811 Jacqueline Teo Hui Yun 15805054 Ting Heng Huat 14973837 Tutor: Leo Kee Chye Tutorial Day / Time: Monday / 2pm Table of Contents Abstract The Tech Bubble Introduction Lowering of Interest Rates Adjustable Rate Mortgage Securitization Mortgage Backed Securities Collateralized Debt Obligation Credit Default Swap Government Reaction and Policies Emergency TARP Repercussions
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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
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Leverage is borrowing money to amplify the outcome of a deal. The financial crisis includes sub-prime mortgages‚ collateralized debt obligations‚ frozen credit markets‚ and credit default swaps. The way that leverage works in a normal deal is that someone can buy merchandise for 20‚000 and sell it to someone else for 11‚000 and they gain 1‚000 in profit. However‚ using leverage if the same person with 10‚000 goes to borrow 990‚000 it will give him 1‚000‚000. He will then go buy 100 boxes with his
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often called financial crises include stock market crashes and the bursting of other financial bubbles‚ currency crises‚ and sovereign defaults. Major causes of Financial Crisis Imprudent Mortgage Lending: Against a backdrop of abundant credit‚ low interest rates‚ and rising house prices‚ lending standards were relaxed to the point that many people were able to buy houses they couldn’t afford. When prices began to fall and loans started going bad‚ there was a severe shock to the financial system
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