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In general, there are three kinds of debt: Secured debt, like a mortgage or a repurchase agreement. With a mortgage, for example, the debt is secured by a lien on the home, and if the debtor does not pay, the creditor can seize the home. Unsecured debt, like a credit card or corporate bond. Governments will generally allow creditors to liquidate many of the ...


8

According to this official link Does the Federal Reserve ever get audited? Yes, the Board of Governors, the 12 Federal Reserve Banks, and the Federal Reserve System as a whole are all subject to several levels of audit and review: The Government Accountability Office (GAO) conducts numerous reviews of Federal Reserve activities. The Board'...


8

Pro Publica keeps an ongoing list of bailout recipients in the United States. Here is a report on the UK bailouts during the crisis: The Comptroller and Auditor General’s Report on Accounts to the House of Commons: The financial stability interventions The SoFFin Wikipedia page has a list of participating German institutions. FACTBOX - Bank bailouts ...


6

Yes it can. If debt originates from the banking system, then it potentially has a side effect of money creation. Whether or not money is actually created when a bank loan is made depends on the banking system's regulatory framework, and the lending policies of its banks, and these can vary widely. However if there is net excess of bank lending over bank ...


6

1) Would lead to the return of general panic led bank runs, and introduce additional instability to the system. It´s not generally appreciated, that 19th century bank runs were not just a symptom of insolvency or illiquidity, but were also occasionally triggered by competitors (other banks) spreading rumours. Generally this is a bad idea that rests on the ...


6

The problem at the bottom of the 2008 crash is that the values of multiple instruments were dramatically over estimated because the risk of default in the various underlyings was dramatically underestimated since it was assumed that they were fully backed by the US government. Although many commentaries focus on the securitization of debt that was not where ...


6

The question is quite complex and an answer should be far beyond looking only at the structure of the derivatives, but i try my best. The initial situation: Between 1998 and 2006, the price of the typical American house increased by 124% Global saving glut due to the dotcom-bubble in the early 2000s, seeking institutions for alternative investments, ...


5

Trying to think of what's on my bookshelf... this is an incomplete list, but it should get you started. The Financial Crisis Inquiry Commission Report is the authoritative overview of the housing crisis and its role in the financial crisis. It's unique in that the staff of the FCIC was able to interview essentially all the major players and had access to ...


4

I wanted to leave this as a comment but I dont have enough rep yet so I am putting this here even though it is not an answer. The problem with the lack of investiments is due to the fact that most of the companies who have a huge part of the consumers demand are technology based companies, I am talking in this case about social networks, etc... And these ...


4

The short answer is "No", if by "small number" we mean something no more than "five". The two characteristics you mention are rather different: "high growth" describes a rate of evolution. Now, it is standard corporate speak to say "we are in an excellent position to grow" to express in a diplomatic way the fact that you have hit rock-bottom. Given the ...


4

The deposits that people have in the banks is a lot more than the money that the banks actually have. This is due to fractional reserve banking. As a consequence, if everybody tries to take out their money, the banks will run out of cash: the banks themselves will be unable to meet their financial obligations, and go bankrupt. When the bank goes bankrupt, ...


4

The Mexican government has a complicated history of currency intervention, which can be read about in a detailed timeline here. However, in 1994 the devaluation was caused by the end of government intervention. Up until that date the Mexican government had a set range of USD values that the peso could float within, so a sort of flexible peg to the USD. In ...


4

We need to distinguish two things here: the intrinsic value of the assets, and their fair value, or market value. No matter how much the price of an asset changes on financial markets (say, stock exchanges), its intrincic value stays the same, all other things equals. Typically, you could use the cost of the asset to assess its intrinsic value: for a house, ...


4

The answer offered by @MD-Tech is unfortunately profoundly wrong on a number of its core assertions. I will first correct these assertions (and offer references while doing so) and then very briefly offer a few points that should put the 2008 crisis in the proper perspective. TL;DR: Government guarantees on mortgages didn't play any role in the crisis; CDOs ...


4

A rather positive view of structural reforms In their recent Economic Policy Reforms 2016, Going for Growth Interim Report, the OECD reviews the main growth challenges faced by OECD and selected non-OECD countries and takes stock of the progress made since 2015 in the adoption and implementation of structural policy reforms to address these challenges. ...


3

A useful principle to have in mind here is the so called 'volatility paradox´ oft-cited by Marcus Brunnermier (Princeton prof): The idea is as follows: a) financial institutions are in the business of taking reasonable risks; b) when the financial system is deemed very stable, then it makes sense for financial institutions to engage in risky activities, ...


3

If you owe euros you have to pay in euros. If for example the British government owes euros, then they get some funds (perhaps take another loan) and in case this is in a currency different from euros they convert it to euros on the market. If the sum is large enough it is wise not to convert it all at once but in smaller installments. This way the exchange ...


3

I believe the single most commonly used metric for contagion is a sharp increase in the correlation of returns in various countries, either within a country (e.g., the correlation of daily returns in the markets for stocks, bonds, and commodities) or across countries (e.g, the correlation of daily returns in the stock markets in Europe, North and South ...


3

In a fractional reserve monetary system loans create money and loan repayments destroy money. Most bank lending in modern times is for the purpose of purchasing real estate. So the amount of money that exists in the economy is closely tied to the enthusiasm for purchasing real estate. You could not really make this kind of statement for any other class of ...


3

It's worth differentiating between the financial crisis of 2007-2009, and the recession that began in December 2007. The financial crisis was indeed caused by a run on wholesale funding that was precipitated by significant losses on real estate, both subprime and otherwise. As noted in the first link, stresses in wholesale funding first appeared in August ...


2

Here is a list of banks that received state aid during the financial crisis.


2

Short answer: A bond issued by a company is less risky than a share of the same company. Longer answer: A company is in bankruptcy if its assets are worth less than its obligations. In case of bankruptcy the assets are sold off in the market or by individual agreements with the creditors. Direct creditors are payed first. If there is any money left, bond ...


2

(1) The Phillips curve is not a structural thing, it is not surprising that the relationship between unemployment and inflation is not constant over time. (2) There's a nice AER paper by Simon Gilchrist and coauthors that argues that inflation did not go down as much as in earlier recessions because financially constrained firms needed to keep their cash-...


2

I am not sure which is your current level of understanding so tailoring the answer seems difficult. At a very basic level, the idea is as follows. Commercial banks and other institutions originate mortgages but have a preference for liquid assets and so they would rather sell them to third parties instead of keeping them in their portfolio until all the ...


2

It’s a means to an end, and to the mandate that these institutions imposed on themselves. We could also call it an “unofficial” mandate since politicians would likely put pressure on them in indirect ways to uphold their primary mandate. That primary mandate is a 2% inflation target. QE of course expands the money supply which can expand the velocity of ...


1

After the Financial crisis of 2007–2008, the inflation's decay became more persistent in many countries. There are several reasons why: The output gap went below zero in developed economies, however, the inflation level decayed moderately only. Changes in the structure of employment. The relative rate of highly educated had increased, therefore, the average ...


1

Yes. The International Monetary Fund yesterday admitted that its mistakes helped plunge Argentina deeper into the red during the currency crisis that crippled the country's economy three years ago. In a report published yesterday by its independent evaluation office, the IMF said it ought to have prevented the Argentine government from ...


1

I don't know if you'd find these specific references helpful to look at, but I hope it's a good start. Quandl has a database called Social Security Administration and if you search "retirement" within the database, you will see datasets on number of retired recipients of social security, along with their spouses and dependents, and the average monthly amount ...


1

Financialization describes the growth of financial services, instruments, and markets in the overall economy (compared industrial and agricultural parts). An important term that often accompanies financialization is financial innovation, which is often used to describe the creation of new financial instruments such as the mortgage-backed security (MBS), ...


1

Financialization is just a broad term for when financial markets become bigger and have more influence on the market economy. I'd say that it wasn't so much markets becoming bigger that directly caused the 2008 crisis, but more that the shadow banking financial market became bigger (intermediaries not subject to the same regulation as normal banks). ...


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