The financial crisis had its roots in the easy-money policies that were pursued by the U.S. Federal Reserve and other central banks following the collapse of the Internet and telecom stock buble in 2000. At the same time, large balance-of-payments surpluses in Asian ecomomics were invested back into U.S. debt securities. This also helped to push down interest rates and contribute to lax credit. a. is it the homeowners that were the bad seed? why did they borrow so much? b. why did banks lend to households with poor credit worthiness? c. what should be done to keep a crisis like this from happening again?
This is a
The financial crisis had its roots in the easy-money policies that were pursued by the U.S. Federal Reserve and other central banks following the collapse of the Internet and telecom stock buble in 2000. At the same time, large balance-of-payments surpluses in Asian ecomomics were invested back into U.S. debt securities. This also helped to push down interest rates and contribute to lax credit.
a. is it the homeowners that were the bad seed? why did they borrow so much?
b. why did banks lend to households with poor credit worthiness?
c. what should be done to keep a crisis like this from happening again?
This refers to the 2008 global financial crisis. (GFC).
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