? Six basic themes in the crisis of 2007??
1.- Financial Innovation ??-The return crisis was produced by a boom without technology. Only financial intro was at play.
-There was an evolution in the practice of banking in the USA.?-The place agencies played a pity role in the all process.????2.- Moral Hazard??-Moral hazard played a study role in the securitization chain.?-The structure of compensation of bankers and traders played a role in the expansion of moral hazard?-Concentration on short term profits encouraged risk fetching and excessive leverage (AIG)??3.- Regulation??-Regulation of : Liquidity; leverage and capital.?-The Glass-Steagall acquit was approved in 1933. ?-Imposed the separation of commercial and investment banking?-In 1999 the US Congress repealed the Glass- Steagall Act.?-In 2004, the SEC allowed investment banks to increase the level of debt they could assume.
4.- behind Banks
?-Financial Institutions that look, act, borrow and lend like banks...but are not adjust like banks.
Non-bank mortgage lenders; structured investment vehicles; investment banks; broker-dealers; notes market funds; hedge and private equity funds, etc?-They were at the heart of the debacle when short-term finance dried up in 2007 and, finally, with the collapse of Lehman Brothers.
5.- Excess Liquidity ??-In the global markets, trade nations had a surplus of nest egg to be invested (Japan; Germany; China).
-At the end, al those savings ended up buying US debt, ?-These savings financed the get frenzy of the 2.000 ?s and thus, propelled the bubble.??6.- Leverage??-what it is: The taking of debt to finance an investment.
-Leverage change magnitude sharply from 1980 on.
???????2) Geopolitical Power Shifts???-The geopolitical order that came wrap up the Second World War is at en end.It delineated a long period of uncontested US dominance, afterward the fall of the Berlin Wall in 1990.??-We are heading towards a multipolar system...If you want to get a full essay, order it on our website: Orderessay
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