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Article Information:
The Causes and Corresponding Strategy of Sub-prime Mortgage Crisis
yongyongzhu
Corresponding Author: Yongyong Zhu
Submitted: October 17, 2012
Accepted: December 19, 2012
Published: May 30, 2013 |
Abstract:
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Make analysis through the five aspects including the Federal Reserve abetting the bubble, mortgage companies making loans perfunctorily, investment banks carefully packaging, credit company’s default assessment and hedge fund pursuing profits. Expound the transmission mechanism and influences of the sub-prime mortgage from the four angles including the foreign investors, the investment portfolio adjustment effect, the asset rating and risk reassessment and the entity economy transmission and the expectancy effect. From above, reach the conclusions which are the following five corresponding strategies: strengthening the management of foreign investment; developing information disclosure; coordinating the macro and micro policies; take precautions against moral hazard with policies; avoiding the excess liquidity. These offer decision-making basis for the further study of the influences and corresponding strategies of sub-prime mortgage.
Key words: Collateralized debt obligation, excess liquidity, investment bank, moral hazard, sub-prime mortgage crisis, ,
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Cite this Reference:
yongyongzhu, . The Causes and Corresponding Strategy of Sub-prime Mortgage Crisis. Research Journal of Applied Sciences, Engineering and Technology, (24): 5592-5597.
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ISSN (Online): 2040-7467
ISSN (Print): 2040-7459 |
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