About The Financial Crisis: A Report on Stock Indices

Author(s)

Marco Mele , Stefano Amighini ,

Download Full PDF Pages: 23 -32 | Views: 380 | Downloads: 107 | DOI: 10.5281/zenodo.3386722

Volume 1 - September 2012 (09)

Abstract

The financial crisis, after pushing governments to adopt exceptional measures to bail out banks and launch challenging plans to revive the economy, has come to expose the sovereign debt of many countries at risk of ''default''. For this reason, the European institutions and national governments have had to intervene and to develop tools for crisis management, such as loans to Greece and the mechanism of European financial assistance, both to strengthen the devices of crisis prevention, based on fiscal consolidation. Pending the completion of the institutional strategy aimed at coordinating European economic policy and budget, all states were required to adopt drastic measures to rebalance national accounts and return to the Maastricht’s criteria. This paper aims to analyze the performance of financial markets over the past tree months, thus representing a true report of what that was and what will happen. 

Keywords

bail out banks, financial crises, financial markets

References

  1. Ambrose, B., R. Buttimer, and C. Capone, Pricing Mortgage Default and Foreclosure Delay, «Journal of Money, Credit, and Banking» 29, 1997, 314-325.
  2. Ambrose, B. and C. Capone, The Hazard Rates of First and Second Defaults, «Journal of Real Estate Finance and Economics», 20, 2000, 275-293.
  3. Baku, E. and M. Smith, Loan Delinquency in the Community Lending Organizations: Case Studies of NeighborWorks Organizations, «Housing Policy Debate» 9, 1998, 151-175.
  4. Bernanke, Ben, Housing, Housing Finance, and Monetary Policy, speech on August, 31, 2007.
  5. Bernanke, Ben, The Global Saving Glut and the U.S. Current Account Deficit, speech on April 14, 2005.
  6. G. Caprio, J.A. Hanson e R.E.Litan, Financial Crises: Lessons from the Past, Preparation for the Future, Brookings Institutions Press, Washington D.c. 2005.
  7. Committee on the Global Financial System, Central bank operation to the financial turmoil, Cgfs Paper n°31, July 2008.
  8. Cowan, A., and Charles Cowan, Default Correlation: An Empirical Investigation of a Subprime Lender, «Journal of Banking and Finance», 28, 2004, 753-771.
  9. Demyanyk, Yulia and Otto Van Hemert, Understanding the Subprime Mortgage Crisis, 2008.
  10. Dominguez, Kathryn, and Linda L. Tesar, A Reexamination of Exchange Rate Exposure, «American Economic Review» 91(2), May issue 2001, 396–399.
  11. Edwards, S., Is the US current account deficit sustainable? If not, how costly is adjustment likely to be?, «Brookings Papers on Economic Activity», 1, 2005, 211–71.
  12. Federal Reserve, Statistical Release, 2010.
  13. Freddie Mac, Office of the Chief Economist, 2009.
  14. Gramlich, Edward, America’s Second Housing Boom, The Urban Institute, February 2007.
  15. Hardin, J., The Robust Variance Estimator for Two-Stage Models, «The Stata Journal» 2, 2002, 253- 266.
  16. Hausmann, R. and F. Sturzenegger, Dark matter makes the US deficit disappear, «Financial Times», 8 December 2005.
  17. International Monetary Fund, Financial Market Update, July 2007. International Monetary Fund, Global Financial Stability Report, January 29, 2008.
  18. Kiff, John, and Paul Mills, Money for Nothing and Checks for Free: Recent Developments in US Subprime Mortgage Markets, Imf Wpo/07/188, July 2007.
  19. Kindleberger, C.P., Measuring equilibrium in the balance of payments, «Journal of Political Economy», 77, 1969, 873– 91.
  20. Krugman, P., Is the strong dollar sustainable?, Federal Reserve Bank of Kansas City, Proceedings, 1985.
  21. Krugman, P., Will There Be a Dollar Crisis?, «Journal of Political Economy», 2007, 436-466. Lamont, O., C. Polk, and J. Saa-Requejo, Financial Constraints and Stock Returns, «Review of Financial Studies», 14, 2001, 529–544.
  22. Mason, Joseph, and Joshua Rosner, How Resilient are Mortgage Backed Securities to Collateralized Debt Obligation Market Disruptions, February 2007.
  23. Mayer, Chris, and Tomasz Piskorski, The Inefficient of Refinancing: Why Prepayment Penalties are Good for Risky Borrower, February 2008.
  24. Minsky, H.P., John Maynard Keynes, Columbia University Press, New York 1975.
  25. Minsky, H.P., “The Financial Instability Hypothesis: An Interpretation of Keynes and an Alternative to “Standard Theory”, «Nebraska Journal of Economics and Business», vol. XVI, nr. 1, 1977.
  26. Minsky, H.P., A Theory of Systemic Fragility, in Altman, E.I. e A.W. Sametz, “Financial Crises. Institutions and Markets in a Fragile Environment”, John Wiley & Sons, New York 1977.
  27. Minsky, H.P., Finance and Profits: The Changing Nature of American Business Cycles”, 1980, in Minsky, H.P. Can “It” Happen Again? Essays on Instability and Finance, 1982, M. E. Sharpe, Inc., New York, trad. 96 it. Potrebbe ripetersi? Instabilità e finanza dopo la crisi del ‘29, a cura di Franco Picollo, Giulio Einaudi editore, Torino 1984.
  28. Oxford Economic Forecast, Forecasting& Analysis, 2008. Pennington-Cross, Anthony, Subprime Lending in the Primary and Secondary Markets, «Journal of Housing Research», 13, 2002, 31-50.
  29. Piskorski, Tomasz and Alexei Tchistyi, Optimal Mortgage Design, working paper, 2007.
  30. Rajan, Raghuram and Luigi Zingales, Financial dependence and growth, «American Economic Review», 88, 1998, 559–586.
  31. Rosengren, Eric, Subprime Mortgage Problems: Research, Opportunities, and Policy Considerations, Federal Reserve Bank of Boston, 2007.
  32. Shiller R., The Subprime Solution. How Today’s Global Financial Crisis Happened, and What to Do about it, Princeton University Press, 2008.
  33. Weagley R., Consumer Default of Delinquent Adjustable-Rate Mortgage Loans, «The Journal of Consumer Affairs», 22, 1988, 38-54.

Cite this Article: