The Financial Crisis of Our Time investigates the mechanism by which the housing industry came into crisis beginning in 2006, and the system of incentivesthat led to financial disaster. In 2006 residential real estate prices peakedand started to fall, then threatened the world's financial institutions in 2007, and confronted the global economy with disaster in 2008. In the past few years, millions of people have lost very substantial portions of their wealth.And while the markets have rebounded considerably, they are still far from a full recovery. Now, professional economists, policy experts, public intellectuals, and the public at large are all struggling tounderstand the crisis that has engulfed us.In The Financial Crisis of Our Time, Robert W. Kolb provides an essential, comprehensive review of the context within which these events unfolded, arguing that while the crisis had no single cause, housing finance played a central role, and that to understand what happened, one must comprehend the mechanism bywhich the housing industry came into crisis. Kolb offers a history of the housing finance system as it developed throughout the twentieth century, and especially in the periodfrom 1990 to 2006, showing how the originate-to-distribute model of mortgage financing presented market participants with a <"clockwork of perverse incentives.>" In this system, various participants-simply by pursuing their narrow personal interests-participated in an elaborate mechanism that led to disaster. Thebook then gives a narrative of the crisis as it developed and analyzes all ofthe participants in the housing market, from the home buyers to investors in collaterialized debt obligations (CDOs). At each step, the book explains in a nontechnical manner the essential relationships among the market participants and zeroes in on the incentives facing each party. The book also includes an extensive glossary and a detailed, authoritative timeline of the subprime financial crisis.Offering a unique look at the participants and incentives within the housing finance industry and its role in the biggest financial catastrophe in recent history, Robert W. Kolb provides one of the most comprehensive and illuminatingaccounts of the events that will be studied for decades to come as the financial crisis of our time. INDICE: Preface 1. Introduction: The Financial Crisis of Our Time Before the Great Depression From the Great Depression to Financial Deregulation From Financial Deregulation to the Savings and Loan Crisis 2. From Securitization toSubprime The Development of Securitization The Process of Securitization: An Overview Credit Enhancement The Subprime Difference 3. Before the Deluge Subprime Lending: To the Peak The Height of Subprime Lending 4. From the Subprime Crisis to Financial Disaster: An Overview The Housing Peak to Hints of Something Wrong The Slide Accelerates Mortgage-Backed Securities and Foreclosures No Relief in 2008 The Climax? Back From the Brink 5. Extinctions Among the Ruins From Countrywide to IndyMac IndyMac Washington Mutual Wachovia Bank Extinctions, Banking Consolidation, and Too-Big-to-Fail 6. The End of Investment Banking Big Brains, Big Egos, and Big Pay Bear Stearns The Bankruptcy of Lehman Brothers Merrill Lynch: The Herd Goes to the Abattoir Goldman Sachs, Morgan Stanley and the Week that Remade Wall Street 7. When Zombies Walk The Earth Fannie Maeand Freddie Mac AIG Citigroup: The Biggest Zombie of Them All Zombies and theFuture 8. Policy Responses and The Beginnings of Recovery Unfurling the TARP The Market Reacts The TARP Evolves Introduction of the TALF Instituting More Programs: The Public-Private Investment Program Support for the Auto Industry Support for Homeowners Green Shoots in the Financial Sector Initial Cost Assessment 9. Causes of the Financial Crisis: Macroeconomic Developments and FederalPolicy The Basic Story Major Asset Price Collapse Concentrated Exposure to the Failing Asset Class Lack of Transparency and Freezing of the Financial System Macroeconomic Developments Federal Stimulative Policy and Legislation Attempts to Combat Mortgage Lending Discrimination and to Expand Home Ownership to Minorities National Homeownership Strategy The Causal Role of the GSEs 10. Causes of the Financial Crisis: The Failure of Prudential Regulation Regulation ofDepository Institutions Regulation of Lines of Business Capital Requirements Interaction Between Capital Regulation and Credit Derivatives Regulation of Size and Scope-<"Too Big to Fail>" Restrictions on Concentration of Risk Regulation of Securities Markets and Supporting Institutions Capital Regulations Off-Balance Sheet Corporate Entities Credit-Rating Agencies Mark-to-Market Accounting Rules Complex Financial Derivatives The Regulation of AIG Poor Regulation of Mortgage Industry Defects in Regulatory Architecture 11. Causes of the Financial Crisis: From Aspiring Homeowner to Mortgage Lender The Borrower The Lender The Appraiser The Mortgage Broker The Mortgage Frenzy, the Originator, and Underwriting Standards 12. Causes of the Financial Crisis: From Securitizer to Ultimate Investor Purchasing Mortgages Creating Securities and Obtaining Ratings To the Ultimate Investor Incentives from Securitizer to Ultimate Investors 13. Causes of the Financial Crisis: Financial Innovation, Poor Risk Management, and Excessive Leverage Financial Innovation and the Creation of Complex Instruments Poor Risk Management Excessive Leverage 14. Causes of the Financial Crisis: Executive Compensation and Poor Corporate Governance Pay at Financial Firms Risk-Taking and Executive Compensation in the Financial Crisis Incentives, Risk-Taking and Compensation at Fannie Mae Executive Compensation and Lehman Brothers Incentive Conflicts Corporate Governance in the Financial Crisis 15. Consequences of the Financial Crisis and the Future It Leaves Us Measuring the Damage: A Warning The Bailout and Its Costs From 2006 to 2009: Our Economic World and How it Has Changed Reduced Circumstances: Our Economic Future Beyond the Merely Economic-American Recessional or American Renewal? Perfecting the Fatally Flawed Regulatory Regimes of the Past The Financial Crisis, the Great Recession, and Institutional Failures Fundamental Reform? <"Too-Big-to-Fail>" Corporate Governance, Executive Compensation, and Firms' Risk-Taking Conclusion: Dopes, Genius, Saints, Scoundrels, and Ordinary People
- ISBN: 978-0-19-973055-1
- Editorial: Oxford University
- Encuadernacion: Cartoné
- Páginas: 424
- Fecha Publicación: 09/06/2011
- Nº Volúmenes: 1
- Idioma: Inglés