Munich Personal RePEc Archive

A functional overview of financial crises development and propagation

Popa, Catalin C. (2008): A functional overview of financial crises development and propagation. Published in: Knowledge Based Organization 2008 International Conference, November 2008, Sibiu, Romania , Vol. 3, No. ISSN 1843-6722 (15. November 2008): pp. 278-282.

[img]
Preview
PDF
MPRA_paper_13368.pdf

Download (117Kb) | Preview

Abstract

The U.S. sub-prime crise developed in the last few months as a dangerous syncope for the entire international financial system, recall for the rethinking of market functionality, revealing the international institutional weakness in financial system supervision on global scale. The mortgage volatility induced by the international dereglementation and derivates contemporary burst, correlated with a relaxed supervision framework, transformed progressively the credit market into a system “bubble”, making possible the distortion of real estates values toward those levels forced by creditors. Throughout a weakness chain, many financial institutions, determined by a savage competition on this sector, left away the prudence and borrowed money from different investors, guarantying the long terms transactions, with short time derivates from speculative short-term market, supplying the bubble. In this context, the paperwork is meant to recall for reinventing the risks models, so that the crises to be anticipated earlier than its development moment.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.