Explain the role of the following factors in the upswing in the financial cycle that preceded the
Question:
Explain the role of the following factors in the upswing in the financial cycle that preceded the global financial crisis:
(a) The implicit state guarantee for 'too-big-to-fail' institutions.
(b) The assumption that MBSs bundled together in CDOs were not highly correlated.
(c) Capital regulation based on risk-weighted assets.
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Related Book For
Macroeconomics Institutions Instability And The Financial System
ISBN: 9780199655793
1st Edition
Authors: Wendy Carlin, David Soskice
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