The financial crisis is an event in time that we will all remember. Professor Corcoran hosted an event that would focus of discussions to figure what happened and what we could do to fix the financial crisis. This allowed for opinions to flow and be made.
There were many reasons that the financial crisis happened. If I could put the problems in a rating system based on Professor Corcoran’s thoughts I would say that banks becoming greedy was the main reason for the crisis. The banks rolled the dice to “raise their leverage levels to unprecedented highs, based on the premise that higher leverage necessarily improved returns” ("Systemic Risk," 2009, p. 2). The second reason is that the global financial government had too many moving parts. This …show more content…
I agree that the banks took too many risks and they did it for one reason, greed. This is one of the contributors to the financial crisis, but I don’t believe that it was the main reason for the financial crisis. I believe the main reason for the financial crisis were the individuals that took out variable loans, loans that they couldn’t pay back, and loans that they shouldn’t have been qualified for. We could put the blame on the banks for making these loans available to people that shouldn’t have received them, but “we have over-borrowed, and we have done that over many, many decades. And now it’s reached just an unbearable peak where people on average cannot repay the debts they’ve got” (Reavis, 2012, p. …show more content…
Their banks made risky investments and loaned to people that were underqualified to receive the loans they received. This was very similar to the problems the US faced in the financial crisis. Japan did not recognize the banks needed to be restructure until the effects appeared. Once the problem was recognized the Japanese government did not move quickly to correct the problem. The US can take away a lot from Japan’s lost decade. The US banks could have recognized the risks of lending to underqualified individuals. They could have also realized that early government intervention was need to restructure the banking
There were many reasons that the financial crisis happened. If I could put the problems in a rating system based on Professor Corcoran’s thoughts I would say that banks becoming greedy was the main reason for the crisis. The banks rolled the dice to “raise their leverage levels to unprecedented highs, based on the premise that higher leverage necessarily improved returns” ("Systemic Risk," 2009, p. 2). The second reason is that the global financial government had too many moving parts. This …show more content…
I agree that the banks took too many risks and they did it for one reason, greed. This is one of the contributors to the financial crisis, but I don’t believe that it was the main reason for the financial crisis. I believe the main reason for the financial crisis were the individuals that took out variable loans, loans that they couldn’t pay back, and loans that they shouldn’t have been qualified for. We could put the blame on the banks for making these loans available to people that shouldn’t have received them, but “we have over-borrowed, and we have done that over many, many decades. And now it’s reached just an unbearable peak where people on average cannot repay the debts they’ve got” (Reavis, 2012, p. …show more content…
Their banks made risky investments and loaned to people that were underqualified to receive the loans they received. This was very similar to the problems the US faced in the financial crisis. Japan did not recognize the banks needed to be restructure until the effects appeared. Once the problem was recognized the Japanese government did not move quickly to correct the problem. The US can take away a lot from Japan’s lost decade. The US banks could have recognized the risks of lending to underqualified individuals. They could have also realized that early government intervention was need to restructure the banking