interest-only payments Housing bubble The bursting of the U.S. (United States) housing bubble, which peaked in 2006, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally. The financial crisis was triggered by a complex interplay of policies that encouraged home ownership, providing easier access to loans for (lending) borrowers, overvaluation of bundled sub-prime mortgages based on the theory that housing prices would continue to escalate
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Bank Risks and Risk Factors Abstract The Federal Reserve System has established a banking risk framework that consists of six risk factors: credit, market, operational, liquidity, legal and reputational risks. During examinations, institutions' risk management structures are reviewed using these risk categories. The Federal Reserve Bank of Chicago (Seventh District) supervision group follows current and emerging risk trends on an on-going basis. This Risk Perspectives newsletter is designed
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The purpose of this analysis is to obtain an improved understanding of “The Great Moderation”, its causes and effects as well as the end of an economic cycle. Additionally, the information gathered can be used to better understand how and why “The Great Moderation” is no longer a valid method of the business cycle. The global economy as well as international markets stand to surge or fall according to the ebb and flow in the market or the business or economic cycles. According to Diego
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Introduction Following the recent global economic downturn, it is clear that the response of central banks and governments is likely to shape the future of our financial markets for many years to come. Their responses in regulating fields such as credit rating agencies, derivative markets and hedge funds will be crucial in relation to economic recovery. Over the course of our essay, we will also discuss areas such as international trade, geo-political issues and the role of monetary authorities
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the type of accommodation he has been provided with. “a decently housed citizen is a more productive individual, a good housing scheme complimented by high environmental standard equates with less expense on public health, and less adverse social effect produces a higher gross national income figure for a country” . This is why it is generally accepted that good housing is a social index of a good government especially in developing countries like Nigeria should especially accept the provision of
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package: The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on February 13, 2015, following discussions that ended on November 24, 2014, with the officials of Malaysia on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on January 23, 2015. An Informational Annex prepared by the IMF. A Press Release summarizing the views of the Executive Board as expressed
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Government Bailouts Economist believe that allowing financial institutions and international corporations to go bankrupt could have a far reaching effect on the government and in particular on the citizens who depend on these organizations Companies such as AIG, Chrysler, Ford, General Motors, Fannie Mae and Freddie Mac should receive bailouts because they provide essential products and services for their consumers as well as provide numerous job opportunities to the citizens of the state
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FISCAL POLICY & MACROECONOMIC MODELS There are three macroeconomic models in which to analyze the effects of changes in fiscal policy: Keynesian, Monetarist and Classical. Keynesian Model The Keynesian model focuses on attempting to manage the “Demand” side of the economy by using taxation and spending to redistribute income and wealth. The rationale is that redistribution of income and wealth via taxation and use of transfer payments [government spending] will drive the “Demand” function
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“Why didn't the Stimulus Act of 2008 generate the desired effects” An economic stimulus package, by definition is designed to stimulate a nation’s economy; therefore by its definition a nation should expect a decrease in unemployment rate, an increase in gross domestic product demand, and an increase on investments; consequently a nation’s overall economic growth. In 2008 and 2009, different types of economic stimulus packages were introduced, all with the purpose of averting an economic recession
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Introduction: On the 2009 Forbes most powerful people’s list the top places namely , 3rd ,4th and the 5th were occupied by the central bankers Ben Bernanke of the U.S. Federal Reserve, Jean-Claude Trichet of the European Central Bank (ECB) and Masaaki Shirakawa of the Bank of Japan respectively throwing the political leaders of some of the most powerful nations behind them. Why they were considered powerful? Well, the year 2009 has its own prominence from the economic prospective. Recession
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