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Lenders’ loose screening
- Anecdote and scholarly research both suggest that moral hazard in mortgage loan securitization (origination-and-distribution) process led to lenders’ loose screening, and thus was one of the major causes of the 2008 financial crisis.
www.tandfonline.com/doi/full/10.1080/20517483.2017.1427126
Oct 26, 2023 · The 2007-2008 financial crisis was caused by a confluence of many factors, including the Dotcom bubble burst, a low interest rate environment, financial products such as mortgage-backed...
Feb 23, 2016 · The “Disastrous Effects of the 2007–2009 Financial Crisis” section of the case will catalog the deleterious effects of the financial crisis including unparalleled unemployment, massive declines in gross domestic product (GDP), and the prolonged mortgage foreclosure crisis.
- Edward J. Schoen
- schoen@rowan.edu
- 2017
The following section discusses the problem of moral hazard in origination and analyses the flaws in mortgage securiti-zation that underlay the current crisis. Subsequently, Section 4 discusses the systemic repercus-sions that turned the subprime-mortgage crisis into a world financial crisis. 3.
May 13, 2015 · In early 2008, institutional failures reflected the deep stresses that were being experienced in the financial market. Mortgage lender Countrywide Financial was bought by Bank of America in January 2008.
- Anjan V. Thakor
- 2015
This paper will demonstrate that chief among the causes of the Crisis was ‘moral hazard,’ or the idea that agents become much more comfortable with risk when they are not the ones bearing any downside cost. Moral hazard plays an important role in all aspects of our
- 535KB
- 40
Jun 6, 2020 · We examine these themes as well as asset pricing, moral hazard (though it was at the root of the crisis only in the Great Recession), the consequences for government as a systemic actor, economic concentration, and capital market regulation in the two crises.
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Jan 1, 2009 · The systemic financial failure of September 2008 (the shadow-banking crisis) was greatly amplified by excessively risky speculations and this led to a rapid deterioration of the entire global...
