![]() ![]() Why was Lehman Brothers allowed to fail while Bear Stearns, AIG, Fannie Mae, and Freddie Mac were saved?.What do “systemic risk” and “too big to fail” mean?.How does the Wall Street financial crisis affect Main Street?.What is the shadow banking system and what was its role in the crisis?.What role did deregulation play in the crisis?.What was the role of the Federal Reserve in the crisis?.What was the role of Wall Street in the crisis?. ![]() How did credit default swaps destabilize A.I.G.?.Why did Fannie Mae and Freddie Mac fail?.How did the housing bubble and subprime crisis turn into the financial crisis?.Was the financial crisis caused by Wall Street greed?.How did the Federal Reserve respond to the subprime crisis?.Why did homeowners take out mortgages that they could not afford to pay off?.Why were lenders so careless in issuing subprime mortgages?.What are mortgage-backed securities and collateralized mortgage obligations?.What were the causes of the housing bubble?.For a more in-depth analysis see our Economics, Bailouts, and Stimulus coverage. What caused this global financial meltdown? Why did the American economy fall apart? Who is to blame? How are all of these events related? Where do we go from here? In the FAQ we offer simplified answers to these and other frequently asked questions. Over the past decade, we’ve seen a credit boom, leading to rapid expansion in global investment, encouraging the rise of a housing bubble, which ultimately evolved into an international financial crisis. While there were many signals in the market before this event, the downfall of Bear Stearns marked the beginning of the oncoming financial crisis that would shake the financial system worldwide and result in a global recession. Fearing a collapse of the investment bank would set off a chain of financial institution bankruptcies, the Federal Reserve partnered with JP Morgan Chase to provide a $29.5 billion bailout for Bear Stearns. The firm could no longer raise private capital to fund its day-to-day activities and, with billions of dollars in liabilities, faced bankruptcy. In March 2008, Bear Stearns, one of the largest investment banks and securities trading firms in the world, rapidly fell apart. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |