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Authors
Affiliations
1 Department of Politics, University of San Francisco, St. Ignatius Institute, 2130 Fulton Street, San Francisco, CA 94117-1080, US
Source
Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics, Vol 50, No 3 (2008), Pagination: 268-287
Abstract
What began in mid-2008 as a downturn in the U.S. housing market soon plunged the world economy in the worst financial crisis since the Great Depression. In response, governments and central banks have been forced to bailout failing and failed financial institutions -- directly through capital infusions and indirectly by providing a wide array of liquidity facilities and guarantees. Why did a seemingly localized problem set off a global financial meltdown? Financial institutions around the world by purchasing over a trillion dollars of complex mortgage-backed securities, especially the so-called subprime loans based on inflated real-estate values made themselves extremely vulnerable to market sentiments.
