A column in the New York Times noted that during the housing boom that ended in 2006:

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A column in the New York Times noted that during the housing boom that ended in 2006: “Global banks had loaded up on these supposedly safe securities, and were at risk of becoming insolvent when their true value became known. Some banks blew up; others were bailed out.”
a. Which securities is the columnist referring to?
b. What caused the value of these securities to decline?
c. Why did this result cause problems for banks?

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Money Banking And The Financial System

ISBN: 1801

3rd Edition

Authors: R. Glenn Hubbard, Anthony Patrick O'Brien

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