T
The Tiger
Guest
What were the origins of the Financial Crisis?
The origins of the Financial Crisis were the low interest rates of the federal bank, adjustable rate mortgages and the easy qualification for loans. The federal interest rate was as low as 2 percent and then they dropped it to 1 percent. At 2 percent it was already low, let alone at one percent. Fixed mortgage rates were disappearing because financial intermediaries tempted house buyers with extremely low interest rates but for short terms. This meant that the mortgage rates would be adjusted after a certain period of time. When the mortgage rates were adjusted people who bought the houses could not pay it and the collapse of real state began. Banks loaned money to people who did not qualify, and the beginning they were able to pay the mortgages because they were very low but when it was adjusted, then is when most people realized they could not afford it.
How and why did the Regulatory Agencies fail?
It is preposterous how the regulatory agencies failed. As the name itself suggests there are agencies not an agency. They are supposed to keep under radar these financial institution at all times to protect the customer safe and economy of the country safe. Banks were supposed to have enough capital in order to get through these difficult times. It seems that we the tax payers have to get them out of the mess they have created.
What is Liquidity and Capital improvement?
What is the solution to the problem, and is the government using the correct solution?
The origins of the Financial Crisis were the low interest rates of the federal bank, adjustable rate mortgages and the easy qualification for loans. The federal interest rate was as low as 2 percent and then they dropped it to 1 percent. At 2 percent it was already low, let alone at one percent. Fixed mortgage rates were disappearing because financial intermediaries tempted house buyers with extremely low interest rates but for short terms. This meant that the mortgage rates would be adjusted after a certain period of time. When the mortgage rates were adjusted people who bought the houses could not pay it and the collapse of real state began. Banks loaned money to people who did not qualify, and the beginning they were able to pay the mortgages because they were very low but when it was adjusted, then is when most people realized they could not afford it.
How and why did the Regulatory Agencies fail?
It is preposterous how the regulatory agencies failed. As the name itself suggests there are agencies not an agency. They are supposed to keep under radar these financial institution at all times to protect the customer safe and economy of the country safe. Banks were supposed to have enough capital in order to get through these difficult times. It seems that we the tax payers have to get them out of the mess they have created.
What is Liquidity and Capital improvement?
What is the solution to the problem, and is the government using the correct solution?