Factors Causing Financial Crises Asset Markets Effects on Balance Sheets –Stock market decline Decreases net worth of corporations. –Unanticipated deflation.
Easy Money Policy Capital Inflows Eager Home Buyers Innovative Banks Rating Agencies Ambitious Mortgage Brokers Securitization MBSs Escalating House.
The Subprime Triggered Crisis : A Perfect Storm Confluence of causes – Past bailouts Bulletproof system!?!?? – Financial innovations: Finance as end.
Asia Financial/Currency Crisis: 1997 - 1998 Hot money – capital flight Vicious circles Debt burdens Bankruptcies Depression Asset price collapse.
The Global Recession The Global Recession. World GDP Growth, 2007-2010. Emerging market countries hoped that they could avoid a similar fate, that there.
