Role of Securitization in the Aftermath of the Financial Crisis essay
Page number: 57-65. e at: www.ijssers.org. Global Financial Crisis GFC and Its Impact on COVID - Crisis. Derwin Tambunan. School of Political Science and. The role of groupthink in the financial crisis. Financial analysts from different parts of the world have explored the issue of groupthink, bringing out its bad side. One of the important elements of the groupthink that led to the economic crisis is blindly following the leaders with a question (Sorscher, 2017). The conventional narrative around securitization after the global financial crisis was based on a fundamentally flawed understanding of its true role and purpose. of financing technology. Ten years ago this week, the collapse of Lehman Brothers became the signaling event of a financial crisis. Its effects, and the recession that followed, on income, wealth, inequality and. However, the difference between the pricing of the different estimates decreases over time, suggesting that as market conditions stabilize in the aftermath of the financial crisis, reliability decreases. In this essay I will argue that historians are confronted with a complex interplay of experience, memory and historical reflection. The crisis is not history in the sense of a distant past, but rather should be interpreted as a decisive turning point for the history of our present. The financial crisis threatens to become so great that it has even replaced it. The essay question is: 'What was the role of the securitization of the US mortgage market in the credit crisis of 2007 8 and the subsequent global financial crisis? Would these events have occurred if the US mortgage market had not been securitized? Your answer should be based on economic theory and empirical evidence. .” Module Learning, At the beginning of the financial crisis, when the value of the conduits' assets experiences a negative shock, the losses for external investors are actually very small. But the impact on the banks is negative and significant, as they bore the financial responsibility of the conduits and had previously committed to repaying maturing ABCPs. Not surprisingly, The Northern Rock had the highest interest rate. Therefore, many banks and financial institutions have suffered large losses. due to losses in the subprime markets. The result of this is that many banks are now reluctant to lend money. In particular, they are reluctant to purchase mortgage packages. A financial crisis is a situation in the global economy in which major budget contracts are terminated in the short term, causing a wide range of unrest within the financial sector Allen, 2012. A The financial crisis is characterized by high bankruptcies within banking institutions and a significant decline of the value of assets.