The US subprime mortgage crisis that broke out in august 2007 was triggered by mortgage delinquencies in the US and has escalated into a global financial crisis. Investor confidence sagged off, and Knightian uncertainty emerged, consequently risk premia increased and liquidity was withdrawn from interbank and credit markets. This financial disturbance and the bankruptcies of some banks and near banks (for example insurance companies, hedge funds) triggered contagiously waves of violent collapses in the financial system. The current financial crisis is adjusting the global growth cycle that was still robust over the past few years, plunging the whole world into the greatest economic crisis since 1929/30. In the following the micro- and macroeconomic causes of this financial crisis will be outlined. Moreover structural and systemic causes, i.e. global imbalances and safe asset imbalances, will be discussed and highlighted in the final synthesis.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Microeconomic Causes of the Financial Crisis
- Credit User Variable
- Financial Intermediate Variable
- Credit Derivative Variable
- Rating Agency Variable
- Macroeconomic Causes of the Financial Crisis
- Regulator Variable
- Monetary Policy Variable
- Monetary Transmissions and the Monetary Policy Variable
- International Financial System and the Monetary Policy Variable
- Asset Inflation and the Monetary Policy Variable
- Fiscal Policy Variable
- Global Imbalances Variable
- Safe Asset Imbalances versus Global Imbalances
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This work aims to analyze the micro- and macroeconomic causes of the financial crisis that began in 2007, with a particular focus on the US subprime mortgage crisis. It explores the complex interplay of factors that contributed to this global economic downturn, examining both the underlying economic conditions and the institutional failures that played a role.
- The role of credit user behavior and poor lending standards in fueling the subprime bubble
- The impact of financial intermediation and securitization processes in facilitating the spread of risk
- The contribution of regulatory failures and monetary policy decisions to the crisis
- The influence of global imbalances and asset inflation on the financial system
- The interconnectedness of financial markets and the potential for contagion effects
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter sets the scene, introducing the US subprime mortgage crisis and its escalation into a global financial crisis. It highlights the impact of the crisis on investor confidence and the resulting liquidity crunch in financial markets.
- Microeconomic Causes of the Financial Crisis: This section explores the microeconomic factors that contributed to the crisis. It focuses on the role of credit users, financial intermediaries, credit derivatives, and rating agencies in driving the subprime bubble.
- Macroeconomic Causes of the Financial Crisis: This chapter examines the macroeconomic forces that contributed to the crisis. It delves into the roles of regulatory policies, monetary policy, fiscal policy, and global imbalances in shaping the financial landscape leading up to the crisis.
- Safe Asset Imbalances versus Global Imbalances: This chapter explores the relationship between safe asset imbalances and global imbalances, further analyzing the role of international financial flows in the crisis.
Schlüsselwörter (Keywords)
Key terms and topics explored in this work include: subprime mortgage crisis, financial crisis, credit user behavior, financial intermediation, securitization, credit derivatives, rating agencies, regulatory failures, monetary policy, fiscal policy, global imbalances, asset inflation, contagion effects, liquidity crunch, Knightian uncertainty.
- Arbeit zitieren
- Josué Manuel Quintana Díaz (Autor:in), 2010, The Micro- and Macroeconomic Causes of the Financial Crisis, München, GRIN Verlag, https://www.grin.com/document/152848
