What three critical factors or preconditions turned a national, U.S. problem into a global financial crisis in 2007. Be sure to address the role securitization played and how it affected regulators
What will be an ideal response?
The three critical factors were the evolution of new and innovative financial products, the integration of financial markets globally combined with the high rates of savings that were coming out of markets that had not participated significantly in the past., and deregulation. New and innovative financial products evolved including securitization, where large numbers of loans are grouped together and shares of the package are sold to virtually anyone, anywhere. These crossed borders easily and the purchasers lose money if the loans cannot be repaid, but it was often difficult to accurately access risk and for regulators to understand and to keep up with the innovations. In general, there was a failure in regulation as the tremendous amount of innovation of instruments and integration of markets evolved. Close regulation was generally not perceived to be in the national interest as it would reduce innovation and efficiency.
You might also like to view...
If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Tina has a comparative advantage in producing banana splits
Indicate whether the statement is true or false
The ____________ is the quantity where quantity demanded and quantity supplied are equal at a certain price.
A. quantity demanded B. equilibrium quantity C. demand schedule D. supply schedu
A manager will have the least confidence in an explanatory variable that
A) does not pass the F-test. B) is expressed as a dummy variable. C) does not pass the t-test. D) constitutes only a small part of R2.
Identify the public good in the following
a. A small library with a limited collection of books b. A crowded children's park in your neighborhood c. The visit to a museum which charges a nominal entry fee d. The scenic view of the ocean from a beach