The Credit Crunch of 2007-2008: A Discussion of the Background, Market Reactions, and Policy Responses
By P. Mizen. 2008
195 citations recorded by the source corpus.
This paper discusses the events surrounding the 2007-08 credit crunch. It highlights the period of exceptional macrostability, the global savings glut, and financial innovation in mortgage-backed securities as the precursors to the crisis. The credit crunch itself occurred when house prices fell and subprime mortgage defaults increased. These events caused investors to reappraise the risks of high-yielding securities, bank failures, and sharp increases in the spreads on funds in interbank markets. The paper evaluates the actions of the authorities that provided liquidity to the markets and failing banks and indicates areas where improvements could be made. Similarly, it examines the regulation and supervision during this time and argues the need for changes to avoid future crises. (JEL E44, G21, G24, G28)
Subfields: Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/7bb260e00b6047fd0d30a4075a13dd56a738406b
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Citations in the corpus
- The global financial crisis and its implications for the Islamic financial industry (2010, background): “It gained momentum and then sharply intensified in September 2008, although many authors point out that the crisis started much earlier and that previous crises had a major role to play in the current global financial crisis ( Mizen, 2008”
- Reflections on the Crisis and on its Lessons for Regulatory Reforms and for Central Bank Policies (2011, unknown): “Further details appear in Mizen (2008). holder of the MBS, it makes the monitoring of the borrower and the evaluation of the fundamental value of the securitized asset di¢ cult and opaque.”