Spill-over Effects of Mortgage Credit Crisis in USA on Europe

Harnessing entrepreneurship and business opportunities for positive impact

Milovan Rankov University of Novi Sad, Serbia milovanche13@yahoo.com

Abstract: Globalization and innovation, hich !sed to be re"arded as im#ortant factors for havin" contrib!tin" the "lobal G$% increase, recently have sho ed !s their do nsides. &azardo!s behavior of the US financial e'#erts ca!sed series of ne"ative effects that soon after s#read o!t all over the orld th!s made everyone feel the re#erc!ssions of their "reedy !ndertakin". (he main #oint of this #a#er is the US s!b#rime mort"a"e crisis and its im#act on )!ro#e. (he roots of crisis are shortly re#resented as to hel# the reader !nderstand hy the effects of crisis have become orld ide. ( o ma*or )!ro#ean economies, +ritish and German, are set as em#irical e'am#les hich stron"ly #rove the ne"ative im#act the US, has had on )!ro#e, into hich the bad effects have s#ilt over. (he #ro"rams, intended to bail o!t the economies, are reminiscences of an old and for"otten #olicy and e'#lained in this #a#er as s!ch. (he concl!sion incl!des the startin" effects of these #ro"rams and it em#hasizes the im#ortance of this crisis as the #erfect t!rnin" #oint.

Introduction

Not even the most #essimistic economists co!ld have e'#ected that the )!ro#ean economy o!ld be so badly affected by the ne"ative im#act of the mort"a"e credit crisis in the US,. (he basis for their #ositive #redictions e'#erts fo!nd in the ass!m#tion that both the market and the investors ere some hat -conservative. by nat!re th!s the ne financial #rod!cts o!ldn/t be as attractive to the )!ro#ean financial markets as e'#ected.
Mainly beca!se of the b!siness of the US com#anies themselves, b!t also beca!se of the

activities of the )!ro#ean financial instit!tions involvin" sec!rities, the crisis almost immediately en"!lfed the t o continents. 0osses that ere re"istered in almost all the com#anies in the financial ind!stry acc!m!lated, ca!sin" serio!s #roblems in their b!siness. (he loss in the orld1s financial sector as increasin" contin!o!sly and reached its #eak21 trillion, in 3!ne 4556. (akin" o!t loans as bro!"ht to a minim!m and the severity of the hole sit!ation serio!sly shook #eo#le7s confidence in banks and other financial instit!tions. (o s!ch an ina##ro#riate environment investors reacted by ithdra in" f!nds from the financial markets and that com#licated the sit!ation even more. (he increase in !nem#loyment and #overty in the hole orld contrib!ted to the decline in the a""re"ate demand hat, f!rther more, dictated by the consistent economic trends, res!lted in the dro# of the G$% in almost all the co!ntries 8US, 4.39, U: ;.49, Germany 3.;9, etc. ...<1. (he hole sit!ation seemed bad, ith "reat #ossibility to deteriorate even more. (he necessity for the state intervention as obvio!s. ,ction #lans, ado#ted by "overnments 8(,R% in the US,, =MStG in Germany, and others><, im#lied in*ectin" lar"e amo!nts of li?!id assets th!s enablin" banks to contin!e ith their o#erations. @ontrary to the la s of the neoliberal theories, active state intervention to re"!late the market and its mechanisms became a reality.

3ohn M. Alin, -, %lan for addressin" the financial crisis. &arvard University, March 4556 2

Roots of the Crisis

,fter almost nine years of a contin!o!s "ro th in share #rices in the US financial markets, #rimarily d!e to the innovations in the field of the information technolo"y, the val!e of shares started to decrease si"nificantly, th!s initiated slo in" do n of the economy. (he b!rst of the -dot com. b!bble and the terrorist attacks on 11th Se#tember contrib!ted to the increase of !ncertainty amon" investors, ho res#onded to this sit!ation accordin"ly by ithdra in" considerable f!nds from the market. S!ch economic climate indicated that the sit!ation co!ld orsen even more if the ma*or #layers7 confidence in the financial market as lost. +!sh7s administration, to"ether ith the director of the =ederal Reserves ,lan Greens#an, advocated si"nificant red!ction in @entral +ank interest rates, that mi"ht have served as an invitation to the com#anies and the #o#!lation to increase their investments and cons!m#tion. Startin" from 4551. the reference interest rate ke#t bein" red!ced by 5,; #ercent every month, so that in 3an!ary 4553. it reached its historic level of 19. Afferin" si"nificant amo!nts of money as accom#anied by more liberal re?!irements, hence conditions for realisin" loans. Namely, in desire to have the accessible money #rod!ctively #laced in the market, banks lo ered their criteria, #artic!larly ith "rantin" mort"a"e loans hich #!t the credit history aside for the time bein". (his force of circ!mstances, es#ecially !nder the infl!ence of the hi"h demand for real estates, initiated s#eedy increase in the #rices of ho!ses. (he follo in" "ra#h re#resents ?!arterly increase in the #rices of real estates for the #eriod 16662455;, as ell as the decline that follo ed soon after, hich ill be thoro!"hly e'#lained later on in this #a#er. Figure 1. Real Estate Prices in the USA2.

."lobal#ro#erty"!ide.com 3

, remarkable #roblem from the very be"innin" as the fact that the s!b#rime loans had the bi""est share in the total iss!ed credit mass. Bf this indicator as to be talked abo!t in abstractions, then e had ne"lected the fact that these debtors ere less desirable as s!ch, there "o the likelihood of them #ayin" off their loans as very small. (o s!ch !nfavorable attrib!tes their debtors had dis#layed, the banks res#onded by offerin" them inconvenient conditions for "rantin" loans. Namely, there as a hybrid interest rate hich as fi'ed in a first fe years and then, after that #eriod, the banks ere free to set the amo!nts the ay they desired. Bn order to acce#t s!ch ne"ative conditions, both sides needed very stron" reasons. =rom the #oint of vie of the debtor, that as the only #ossibility for f!lfillin" -(he ,merican $ream. beca!se of the bad credit history or their c!rrent credit ability. An the other hand, the banks, havin" been enco!ra"ed by the increase in the #rices of ho!ses, did not ?!estion the #ossibility of e'#andin" the n!mber of delin?!ent debtors, and they considered that any #res!m#tively bad scenario co!ld be resolved by sellin" the ho!ses that had been im#o!nded, hat o!ld hel# them make a #rofit a"ain. Bn addition, banks ere increasin"ly relyin" on the b!siness ith sec!rities. +y this action, banks transferred *!nk assets to a se#arate le"al entity 8S%C S#ecial %!r#ose Cehicle< and thereby im#roved credit #otential, ith red!cin" risk to a minim!m. (his #henomenon led to the e'#ansion of sec!rities hich had a base in s!b#rime loans 8M+S Mort"a"e2backed sec!rities<.Relatively ne financial #rod!cts ere not only attractive to the financial markets in the US,, b!t the considerable vol!me of trade as also re"istered in stock e'chan"es thro!"ho!t the orld , es#ecially in Destern )!ro#e, @hina and 3a#an 3. (he reflection on the economy as e'tremely #ositive and contrib!ted to the increase in activity and to the si"nificant "ro th in G$% d!rin" this #eriod. ,nd everythin" as movin" in a #ositive direction !ntil the banks, after the e'#iry of the fi'ed interest rates for hybrid loans, decided to chan"e the interest rates and made n!mero!s of debtors !nable to #ay off their debts #ractically over ni"ht. (he rate of the delin?!ent debtors and the n!mber of the ho!ses im#o!nded "re ra#idly. Anly in 455E. nearly 4 million ho!ses ere im#o!nded and most of the banks offered them in the market, thereby initiatin" the decrease in the #rices of real estates. (he ne"ative im#!lse, initiated by the colla#se of the mort"a"e market, s#read at hi"h s#eed and cre#t into every #ore of the financial system. (he bankr!#tcies of banks, ins!rance firms and other com#anies hich trade ith the sec!rities iss!ed by the s!b#rime loans, became an everyday life. =inancial "iants s!ch as -+ear Stears-, -0ehman +rothers., and similar com#anies colla#sed !nder the blo of the first ave of the crisis, hat res!lted in n!mero!s harmf!l conse?!ences others co!ld have felt, as ell.

,drian +l!ndell2Di"nall -(he S!b#rime @risisF Size, $elevera"in" and Some %olicy A#tions. $ec. 455G 4

(his as a clear si"nal to the US "overnment to start dealin" more serio!sly ith the iss!e of illi?!idity and the other diffic!lties financial com#anies ere faced ith. Uncertainty, the bi""est enemy of any investment, a"ain #layed a si"nificant role in dee#enin" the crisis and contrib!ted to the more evasive de#reciation of the val!e of shares in stock e'chan"e markets aro!nd the orld. Re"ardless of the fact that the crisis had act!ally started as a res!lt of the hazardo!s behavior of the financial instit!tions in the US, the losses, havin" been initiated by the colla#se of these very instit!tions, affected the orld economyH.

Crisis of mortgage loans in the UK

(he United States and Great +ritain had the same str!ct!re and handled b!siness in the financial sector in the same ay for years. Dith the stron" #olitical s!##ort, and the motivation comin" from the @entral +ank of )n"land the b!siness ith sec!rities as "ettin" ever more im#ortant, so that the n!mber and the ty#es of sec!rities assets "re ra#idly. (he most attractive activities related to the sec!rities in I#rimeI and Is!b#rimeI mort"a"e loans ere #erformed by many banks. Dhat as ty#ical of the US and Great +ritain, b!t si"nificantly
4

&ans2& +le!el I(he Germany +ankin" System and the Global =inancial @risisF @a!ses, $evelo#ment and %olicy and Res#onsesI Mart 4556 5

different from the rest of the orld, as the fact that in these t o co!ntries a lar"e n!mber of mort"a"e loans as a##roved by the brokers. Bn this ay, active analysis of the n!mber of debtors, as ell as the concern abo!t the #ros#ects for debt re#ayments, as #!t aside and the ?!antity of the loans "ranted became a #riority. (he financial derivatives market in the U: as the lar"est one in the orld and the hole financial ind!stry #rod!ced E9 of G$%. (he decline in interest rates and the eakenin" of credit standards lately have res!lted in the "ro in" tendency of the #o#!lation and the com#anies to borro . (he n!mber of credit arran"ements and the real estate #rices ke#t risin" 8the #rice inde' of real estates in the U: has risen from 155 in year 4555. to 4H5 in year 455E.<. &o ever, the decrease in #rices that occ!rred soon after that, as a res!lt of the ne"ative im#!lses comin" from the US, contrib!ted to the deterioration of the sit!ation. (he lar"est banks in the U: market, in a ro , re#orted the li?!idity #roblems and asked for hel# from the state. Bn its assets, these banks, like the US ones, re#orted n!mero!s orthless sec!rities iss!ed on the basis of s!b#rime mort"a"es. -Northern Rock., -&+AS., -+radford and +in"ley. ere *!st some of the e'am#les, de#ictin" the #roblematic sit!ations. (he -Northern Rock. +ank as the eleventh lar"est bank in the U: ith a total ca#ital of 113.; billion #o!nds. Bt as e'tremely active in the mort"a"e loans market, hat as obvio!s from the fact that in the mid2455E. the val!e of the a##roved mort"a"e loans as aro!nd 15.E billion #o!nds or a##ro'imately 169 of the total val!e of loans "ranted in the U: that year. (he follo in" "ra#h sho s that from 4555. the shares of these sec!rities have constantly "ro n. (he first level re#resents the savin"s de#osits, hich are relatively stable so!rce of f!ndin", ith the standard #artici#ation. (he second level re#resents sec!rities res!ltin" from the sec!rities b!siness ith loans, hose share, as #revio!sly mentioned, has increased dramatically since4555. (he third and the fo!rth level re#resent other liabilities and assets hose #artici#ation as standard;. Figure 2. Capital Structure of Northern Rock Bank6.

Son" Shin -Reflection on Northern RockF (he +ank R!n that &eralded the Global =inancial @risis. Se#t. 4556
6

Bbid 6

S!ch a fra"ile str!ct!re and active #artici#ation in international financial markets ca!sed for the first effects of the crisis to be seen and e'#erienced on 1Eth Se#tember 455E., hen the bank so!"ht the assistance of the @entral +ank as to be able to contin!e ith f!rther o#erations. (he analysis sho ed that the bank as solvent and that attainin" "!arantees by the state o!ld be the best sol!tion so as to re"ain the tr!st of its clients. &o ever, it did not sho any res!lts and on 41 =ebr!ary 455G. (he Northern Rock +ank as nationalized.

=inancial instit!tions, s!ch as -&+AS. and -0oyds. had 3J, that is 43 billion #o!nds, res#ectively in these to'ic loans. S!ch a str!ct!re threatened to create #roblems in the o#erations of these instit!tions. (he first #roblems that -&+AS. re#orted on =ebr!ary 455G. ere related to the loss based on the sec!rities b!siness orth 44E million #o!nds. Unfort!nately, the loss did not sto# at that fi"!re, b!t increased instead, and in 3!ly that same year it reached the level of 1.56 billion #o!nds. ,fter that, it as clear that the nationalization as the only sol!tion, hat event!ally ha##ened in Actober 455G., hen the -0oyds (S+. took over the control #acka"e. Figure . !"P flo# in Unite$ %ing$o&'.

.ne s.bbc.co.!k 7

Re#erc!ssions, that the hole economy felt, ere also very serio!s. Gross domestic #rod!ct has been decreasin" re#eatedly for si' ?!arters since the be"innin" of 455G. Bt is im#ortant to note that s!ch a decline has not been remembered since 16;;. +eside man!fact!rin", these si"nificant effects have reflected badly on !nem#loyment too, hich is c!rrently at the level of E.69, that bein" the hi"hest level in the last eleven years. Dhat is even orse is the fact that the contin!al "ro th in !nem#loyment is e'#ected in the !#comin" #eriod. Bn re"ards to the str!ct!re, the orst sit!ation is in the financial and the constr!ction sectors, that have been recordin" a #ermanent market "ro th since 455G. Bn addition to that, the !nskilled, yo!n" em#loyees have #aid the hi"hest #rice of the "lobal economic crisisG.

Bt as clear to everyone that the sit!ation as alarmin". (he necessity for some serio!s reaction at all levels as not ?!estionable. Bn order to avoid blockin" the o#erations in the financial sector, hich as ca!sed by li?!idity #roblems in banks, #ermanent in*ections of money by the @entral +ank of )n"land ere re?!ired. (his o!ld hel# banks to contin!e iss!in" credits and c!stomers o!ld be more confident in banks. Bn addition to motivate savin"s, the val!e of "!arantees on savin"s de#osits increased from 3;,555 to ;5,555 #o!nds. Government #lan and the #lan of the committee for the economic crisis ere to create an atmos#here for increased investment and cons!m#tion. +y e'#ansive monetary #olicy of lo erin" the @entral +ank interest rates and e'#ansive fiscal #olicy of lo erin" ta' rates they created the climate for increased investment of b!siness sector. (he #rocess of lo erin" interest rates in 4556. landed at an e'tremely lo level of 5.;96.
8

.tradin"economics.com .ne s.bbc.co.!k 8

(he desired effects of any si"nificant increase in investments eren7t achieved at first, as evidenced by the fall in G$%. &o ever, the reason for ho#e as the fact that in the last ?!arter it as only 5.H9. Bn addition, m!ch more im#ortant reason for o#timism as the increasin" #rices of real estates. )conomists believe that after each crisis, d!rin" hich the de#reciation of real estate #rices occ!rs, this market e'#eriences the slo est recovery since the s#ec!lators, as ell as the #o#!lation, tend to think that #rices ill fall even more and they ait for a moment hen #rices o!ld come to a minim!m. Bn this aitin" #eriod #rices e'#erience the -free2fall.. (he sit!ation in the U: f!lly dis#roved this theory and in early 4556. a steady "ro th as recorded. Figure (. Real Estate Prices in U%1)

Impact of the Crisis on

erman!

Bn the #recedin" years, the develo#ment of the financial sector in Germany did not follo the #ro"ress of the financial systems of the co!ntries from the re"ion. (he mort"a"e market in Germany, hich has been e'istin" for abo!t 455 years no , is si"nificantly different from the ,n"lo2Sa'on ty#e of the mort"a"e market. Bn addition to that, since the 1665s German banks have been iss!in" bonds 8%fandbriefe< based on mort"a"es, b!t in contrast to the methodolo"y of the US, and the U:, mort"a"es have not been transferred onto the le"al entity, b!t the banks
10

.thisismoney.com 9

ke#t them instead. (hose bonds are sold ith the lo interest rate, beca!se of their hi"h li?!idity and safety, since their correctness is bein" constantly monitored by the bank. +esides, for a bond iss!e, it is necessary to "et a state1s consent, hich can only be received if all the le"al r!les are bein" follo ed and if it is allo ed for the state to monitor the bonds all the time. Re"ardless of hat has been #revio!sly mentioned, the financial sector does not #lay a si"nificant role in the domestic #rod!ct of Germany, meanin" that direct contrib!tion of financial ind!stry to the G$% of the co!ntry is not si"nificantly bi". @om#ared ith other co!ntries from the re"ion and the orld, it is clearly seen that its minor contrib!tion to the added val!e of G$% is only ;9. (he follo in" "ra#h confirms that em#irically11. =rom hat has been #revio!sly mentioned, it co!ld be ron"ly concl!ded that any #ositive and es#ecially ne"ative chan"e in this sector o!ld not have any ne"ative effects on the real economy itself. An the contrary, since the be"innin" of the financial crisis, the financial sector has s!ffered the loss of abo!t 3G billion )!ros, hich is, by some #redictions, only 159 of the overall loss. (he real estate market stayed #retty m!ch stabile, ith the "ro th of only ;,69 in the #eriod from 4553 to 455J, as o##osed to the markets in other co!ntries from the re"ion, here the #rices "re ra#idly 8Breland 1;39, Greece 1HG9 and S#ain 1349<. (hat as one of the main reasons that enabled German economy to save itself from the first ave of the crisis ca!sed by the ra#id do nfall of the real estate #rices. &o ever, the second ave, hich as created as a conse?!ence of the bankr!#tcy of bi" investment banks and the loss of the val!e of bonds, hich ere iss!ed based on the mort"a"es, co!ld not left Germany imm!ne to the "lobal crisis.

=irst serio!s #roblems ere re#orted already in ,!"!st 455G by Sachsen 0+ and $e!tsche Bnd!striebank ,G. Sachsen 0+ re#orted losses, hich ere the conse?!ence of the trade ith sec!rities iss!ed on the base of s!b#rime mort"a"es, and they asked for the loan to kee# its c!rrent li?!idity. 0ater on, all the other banks, in a ro , re#orted h!"e losses and the decrease in val!e of e?!ity, amon"st them first havin" been +ayern0+, then B:+, $e!tsche +ank, and others. Ne't "ra#h sho s the list of German banks that re#orted the bi""est losses in 455G 14. Figure *. +osses of ,anks in !er&an- in 2)).
11

$BD -Germany 0osses its Dallet b!t )sca#e Ma*or &arm. Act 455G 10

Bt is also im#ortant to reflect on the distrib!tion of the loss amon" three basic col!mns of bankin" that e'ist in the German financial sector. (he first and the third level are commercial and coo#erative banks that have si"nificantly lo ered losses in com#arison to their market shares, hich is the reflection of their mana"ers7 interests, ho anted to make lo er, b!t more certain income. (he second level is savin"s banks, hich have had dis#ro#ortionally h!"e losses hen com#ared to their market shares. (he reason for this is their active #artici#ation in the international financial market, as ell as the e'tremely hazardo!s behavior of their mana"ement, hich is !# for disc!ssions for a m!ch lon"er #eriod of time. (he fo!rth level is s#ecialized banks, hich are the only ones to make lo er loss in com#arison to their market share13.

(he dama"e that entire economy has s!ffered directly as a conse?!ence of the loss in the financial sector 8abo!t 5.H9 of its total val!e or 19 of G$%< is minor hen com#ared to the indirect effects of this crisis. (he first ste# every bank takes the moment it becomes a are of its loss and #ossible li?!idity #roblems is to ti"hten the conditions for lendin" and to increase the interest rate.

12

&ans2&. +le!el -(he Germany +ankin" System and the Global =inancial @risisF @a!ses, $evelo#ments and %olicy Res#onses. March 4556
13

Bbid. 11

S!ch behavior res!lts in the increase in savin"s 8in #eriod from 455E to 455G savin" as increased for 1H.J9<, b!t also in the decrease in investments taken by firms, as ell as those taken by the #o#!lation. Moreover, hat occ!rs is the decrease in inter2bankin" loans, hich additionally com#licates the sit!ation and the li?!idity #roblems. ,ll to"ether it makes the n!mber of the allo ed loans fall drastically, hich has been the case ith Germany, and that is #roved by the follo in" "ra#h, hich analyses the n!mber of a##roved loans to small and medi!m firms. &o ever, #olicy makers are a are of the #ossible conse?!ences of the fall of total savin"s and therefore they have !ndertaken a serio!s of actions to hel# banks in order to enable them to do their b!siness normally1H. (he action #lan for the stabilization of the financial market 8=inanzmarktstabilisier!n""esetz 2 =MStG< as made incredibly fast and on Actober 1Gth it as made #!blic and a##lied immediately. (he basic idea of that #lan as to balance the money market and banks1 b!siness. Modeled accordin" to the ,merican (,R%, a h!"e amo!nt of money as #lanned to be !sed for that #!r#ose, abo!t H55 billions of )!ros. (he first H55 billions ere #lanned to serve as a "!arantee for the assets of the banks, hile the rest as to be !sed for the reca#italization of banks and for #!rchasin" val!eless assets. (he nationalization of the banks as also one of the #ossible sol!tions for the li?!idity #roblems, in hat ay the state o!ld #!m# li?!id assets into the bankin" system and rehabilitate it for normal b!siness, and in ret!rn it o!ld "et a share in the o nershi#. =irst nationalization as done ith @ommerzbank, hen the #acka"e of 4;9 of e?!ity as overtaken1;.

CONCLUSION

(he hazardo!s behavior of certain individ!als in the US financial market ca!sed that very sector to colla#se com#letely, there "o #!ll the entire economy into a recession. (he bankr!#tcies of investment banks and other financial or"anizations, involved in b!sinesses ith ne financial #rod!cts, became an everyday life, hile the val!e of the assets as de#reciated over ni"ht. Under the infl!ence of these ne"ative effects, bad conse?!ences s#ilt over th!s ere felt in the entire orld. +anks in the U: and Germany ke#t re#ortin" h!"e losses and askin" for hel# from the central monetary instit!tions. (he e'istin" economy sector as also badly affected. (he stock indices reflected every vibration and dis#layed the c!rrent state of the economy. Bn November 455G., the ind!strial inde' $a
14

$BD +erlin -Germany 0oses its Dallet b!t )sca#es Ma*or &arm. Act 455G

15

,kos Rona2(as -@ons!mer and @or#orate @redit Ratin" and the S!b#rime @risis in the US ith Some 0essons for Germany. Se#tember 455G 12

3ones fell do n to the lo est level ever recorded in history, i.e. E;;4. (he decrease in the economic activity initiated a h!"e "ro th of !nem#loyment, in the US, 15,49, in )!ro zone 6,E9, in the U: E,G9 and in the other co!ntries of the orld, res#ectively. Since the iss!e in ?!estion is the orld ide economy crisis and not *!st a minor economic do nt!rn, it has only attached even "reater im#ortance to the very moment at hich f!rther m!t!al ste#s for overcomin" the ne ly arisen sit!ation are taken and decided !#on. An the other hand, the a areness of the #olicy makers that there is a bi" similarity bet een the crisis that has been ha##enin" these days and the one from 1646 has made them ever more confident that the only #ossible sol!tion to the e'istin" #roblem is active intervention of the "overnment. Re"ardless of the "reat resistance of the ta' #ayers, ho are s!##osed to carry o!t the hole b!rden of the stabilization #ro"rams, (,R%, =MStG and other similar #ro"rams have been acce#ted itho!t any corrections hatsoever.
=irst, b!t fairly small #ositive effects of the #ro"rams mentioned above, ere felt already by the mid of 4556. +anks that had received the f!ndin" from the (,R% ere able to make #rofit and re#ay the loan, and the stock indices in the US, and the )U recorded an increase. &o ever, the entire economic #ict!re is far from bein" ideal and it is !nreal to e'#ect any si"nificant im#rovement any time soon .

"iterature:
1. ,drian +l!ndell2Di"nall I(he @!rrent =inancial @risisF @a!ses and %olicy Bss!esI $ecember 455G 4.,drian +l!ndell2Di"nall I(he S!b#rime @risisF Size, $elevera"in" and Some %olicy A#tionsI $ecember 455G 3. ,kos Rona2(as I@ons!mer and @or#orate @redit Ratin" and the S!b#rime @risis in the US ith Some 0essons for GermanyI Se#tember 455G H. ,ntif Mian, ,mir S!fi I (he conse?!ences of mort"a"e crisis e'#ansionF evidence from 455E mort"a"e defa!lt crisis I University of @hica"o Grad!ate School of +!siness, May 455G ;. @risto#her R. Dhalen I (he S!b#rime @risis 2 @a!se, )ffect and @onse?!ences I ,t indiana State University, March 455G
13

J. @hris $aniel, Nicole @. Garsmobke, 0a rence $. :a#lan, :evin 0. %etrasic I (,R%2@%% ,##lication #rocess and intera"ency coordination ro!nd t oI Actober 455G E. @ambel R. &arvey, I(he =inancial @risisF Dhat needs to ha##en after (,R%I 3an!ar 4556 G. $avid 0!tton, I(he re"!lation of hed"e f!nds at )U levelF the US s!b2#rime crisis in conte'tI ,#ril 455G 6.$BD +erlin, IGermany 0oses its Dallet b!t )sca#es Ma*or &armI Actober 455G 15. =rnacis ,. 0on"staff I (he S!b#rime @redit @risis and @onta"ion in =inancial Markets I ,!"!st 455G 11. G!ln!r M!drado"l!, I(he U: of 455GF Dhat is real and hat is behavio!ralI 14. &ans &. +le!el, I(he Germany +ankin" System and the Global =inancial @risisF @a!ses, $evelo#ments and %olicy Res#onsesI March 4556 13. &y!n Son" Shin, IReflection on Northern RockF (he +ank R!n that &eralded the Global =inancial @risisI November 4556 1H. Boana 0o"o*anB, I(he @redit and the +ailo!t %lan in US and U:I, Se#tember 455G 1;. Bn"olf $ittmann, )rnest M!a", I+ankers on the +oards of Germany =irmsI =ebr!ary 4556 1J. 3ames l. Gatt!so, $avid @. 3ohn, 3.$. =oster I (,R% and (reas!ryF (ime to allo markets to orkI November 455G 1E. 3ames R. +arth, (on" 0i I %ers#ectives on the S!b#rime Mort"a"e @risis I Mikene instit!te, $ecember 455E 1G. 3ohn M. Alin, I , %lan for addressin" the financial crisisI &arvard University, March 4556 16. 3ohn :off, %a!l Mills, I Money for Nothin" and @hecks for free, Recent $evelo#ments in US s!b#rime Mort"a"e @risis, 3!ly 455G 45. 0arry @hilds I Mort"a"e Meltdo n, Affers 0essons for all, Se#tember 455E 41. Marti*n :onin"s and 0eo %antitch IUS =inancial %o er in @risisI $ecember 455G 44.Ma'imilian 3. &all I(he s!b2#rime crisis, the credit cr!nch and bank Ifail!reIF ,n assessment of the U: a!thorities res#onseI 43. Michel G. @hroy, Robert ,. 3arro , St!art M. =!rnb!ll I (he S!b#rime @redit crisis 455E I 3!ly 455G 4H.Aliver +lanchard I(he @risisF +asic Mechanisms, and ,##ro#riate %oliciesI $ecember 455G
14

4;. Randall DrayI 0essons from the S!b#rime Meltdo n I (he 0evy )conomics instit!te, $ecember 455E 4J. Ravi Sa"ori , I $emystifyin" the S!b#rime crisisI Actober 455E 4E. Rebel ,. @on, I (he &o!sin" asset relief #ro"ramF , #lan for stabilizin" ho!sin" and sec!rities marketI March 4556 4G.(akeo &oshi, ,nil :. :shyar, I Dill (,R% s!cceedK 0essons from the 3a#anI National +!rea! of )conomic Research, March 4556 46. L!liya $emyaniyk, Atto Can &emert I Understandin" the S!b#rime @redit @risis I =ebr!ary 455G 35. 31. 34. 33. .ne s.bbc.!k .thisismoney.co.!k .tradin"economics.com ."lobal#ro#erety.com

15