Effects of the Subprime Crisis on the U.S. American Financial Reporting System PDF Download
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Author: Miriam Janzen
Publisher: diplom.de
ISBN: 3836632012
Category : Business & Economics
Languages : en
Pages : 110
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Book Description
Inhaltsangabe:Introduction: The Subprime Crisis became noticeable first in the second half of 2006, when many subprime mortgage borrowers in the United States of America (U.S.) were no longer able to make their loan payments, and securities linked to those mortgages, that had been sold all over the world, turned out to be often worth quite less and in general substantially more risky than market participants had expected. The crisis caused several major financial institutions and mortgage lenders to face substantial liquidity problems or even to file for bankruptcy, and Governments to provide funding in order to limit further damage to the economy. As the market tried to figure out the problems underlying the crisis, financial reporting, especially regarding derecognition of financial assets, special purpose entities and fair value measurement, became a matter of public concern. Consequently, the purpose of this work is to discuss these concerns in order to estimate whether and to what extend financial reporting might have contributed to the crisis and to present and assess the usefulness of actions taken by the U.S. Financial Reporting System in response to the crisis. In order to meet this objective, the second main chapter provides a brief description of how the housing boom and the subsequent crisis evolved. The information provided therein shall contribute to the reader s understanding with respect to the following passages and especially judgements made by the author regarding the role of financial reporting in the crisis. The third main chapter will describe the U.S. Financial Reporting System, by providing basic information about U.S. institutions that authoritatively deal with the elements of the system, including their aims, basics about their work and how they interact. The fourth main section of the paper will examine the relevant reporting concepts and disclosure requirements, provide suggestions for improvements, and assess concerns voiced by market participants with respect to financial reporting. Subsequently, the thesis will analyze and judge actions taken by authoritative institutions of the U.S. Financial Reporting Sytems in response to the crisis. This thesis considered publications issued until December 10, 2008. Inhaltsverzeichnis:Table of Contents: Table of ContentsI List of Abbreviations.III List of SymbolsV 1.Introduction1 2.History of the Subprime Crisis2 2.1The Term Subprime in Context of the Crisis2 2.2Key Causes [...]
Author: Miriam Janzen
Publisher: diplom.de
ISBN: 3836632012
Category : Business & Economics
Languages : en
Pages : 110
Get Book Here
Book Description
Inhaltsangabe:Introduction: The Subprime Crisis became noticeable first in the second half of 2006, when many subprime mortgage borrowers in the United States of America (U.S.) were no longer able to make their loan payments, and securities linked to those mortgages, that had been sold all over the world, turned out to be often worth quite less and in general substantially more risky than market participants had expected. The crisis caused several major financial institutions and mortgage lenders to face substantial liquidity problems or even to file for bankruptcy, and Governments to provide funding in order to limit further damage to the economy. As the market tried to figure out the problems underlying the crisis, financial reporting, especially regarding derecognition of financial assets, special purpose entities and fair value measurement, became a matter of public concern. Consequently, the purpose of this work is to discuss these concerns in order to estimate whether and to what extend financial reporting might have contributed to the crisis and to present and assess the usefulness of actions taken by the U.S. Financial Reporting System in response to the crisis. In order to meet this objective, the second main chapter provides a brief description of how the housing boom and the subsequent crisis evolved. The information provided therein shall contribute to the reader s understanding with respect to the following passages and especially judgements made by the author regarding the role of financial reporting in the crisis. The third main chapter will describe the U.S. Financial Reporting System, by providing basic information about U.S. institutions that authoritatively deal with the elements of the system, including their aims, basics about their work and how they interact. The fourth main section of the paper will examine the relevant reporting concepts and disclosure requirements, provide suggestions for improvements, and assess concerns voiced by market participants with respect to financial reporting. Subsequently, the thesis will analyze and judge actions taken by authoritative institutions of the U.S. Financial Reporting Sytems in response to the crisis. This thesis considered publications issued until December 10, 2008. Inhaltsverzeichnis:Table of Contents: Table of ContentsI List of Abbreviations.III List of SymbolsV 1.Introduction1 2.History of the Subprime Crisis2 2.1The Term Subprime in Context of the Crisis2 2.2Key Causes [...]
Author: Financial Crisis Inquiry Commission
Publisher: Cosimo, Inc.
ISBN: 1616405414
Category : Political Science
Languages : en
Pages : 692
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Book Description
The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.
Author: Adam Tooze
Publisher: Penguin
ISBN: 0525558802
Category : Business & Economics
Languages : en
Pages : 720
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Book Description
WINNER OF THE LIONEL GELBER PRIZE A NEW YORK TIMES NOTABLE BOOK OF 2018 ONE OF THE ECONOMIST'S BOOKS OF THE YEAR A NEW YORK TIMES CRITICS' TOP BOOK "An intelligent explanation of the mechanisms that produced the crisis and the response to it...One of the great strengths of Tooze's book is to demonstrate the deeply intertwined nature of the European and American financial systems."--The New York Times Book Review From the prizewinning economic historian and author of Shutdown and The Deluge, an eye-opening reinterpretation of the 2008 economic crisis (and its ten-year aftermath) as a global event that directly led to the shockwaves being felt around the world today. We live in a world where dramatic shifts in the domestic and global economy command the headlines, from rollbacks in US banking regulations to tariffs that may ignite international trade wars. But current events have deep roots, and the key to navigating today’s roiling policies lies in the events that started it all—the 2008 economic crisis and its aftermath. Despite initial attempts to downplay the crisis as a local incident, what happened on Wall Street beginning in 2008 was, in fact, a dramatic caesura of global significance that spiraled around the world, from the financial markets of the UK and Europe to the factories and dockyards of Asia, the Middle East, and Latin America, forcing a rearrangement of global governance. With a historian’s eye for detail, connection, and consequence, Adam Tooze brings the story right up to today’s negotiations, actions, and threats—a much-needed perspective on a global catastrophe and its long-term consequences.
Author: Mr.Luc Laeven
Publisher: International Monetary Fund
ISBN: 1451873549
Category : Business & Economics
Languages : en
Pages : 43
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Book Description
This paper shows that banks use accounting discretion to overstate the value of distressed assets. Banks' balance sheets overvalue real estate-related assets compared to the market value of these assets, especially during the U.S. mortgage crisis. Share prices of banks with large exposure to mortgage-backed securities also react favorably to recent changes in accounting rules that relax fair-value accounting, and these banks provision less for bad loans. Furthermore, distressed banks use discretion in the classification of mortgage-backed securities to inflate their books. Our results indicate that banks' balance sheets offer a distorted view of the financial health of the banks.
Author: Mr.Stijn Claessens
Publisher: International Monetary Fund
ISBN: 1475561008
Category : Business & Economics
Languages : en
Pages : 66
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Book Description
This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.
Author: United States. Department of Housing and Urban Development
Publisher:
ISBN:
Category : Government publications
Languages : en
Pages : 120
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Book Description
Author: Raymond T. Ovanhouser
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 156
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Book Description
There is no precise definition of "financial crisis," but a common view is that disruptions in financial markets rise to the level of a crisis when the flow of credit to households and businesses is constrained and the real economy of goods and services is adversely affected. Since mid-2007, central bankers -- including the Federal Reserve -- have laboured to keep the downturn in U.S. subprime housing from developing into such a crisis. While subprime problems were widely anticipated, the subsequent spread of turmoil into many seemingly unrelated parts of the global financial system was not. Many losses occurring in diverse firms and markets -- often quite severe -- have features in common: the use of complex, hard-to-value financial instruments; large speculative positions underwritten by borrowed funds, or leverage; and the use of off-the-books entities to remove risky trading activities from the balance sheets of major financial institutions. It is not yet clear whether financial market problems will significantly slow the economy: many believe that the current episode is simply the downside of a normal credit cycle, that is, a natural corrective to several years of unusually easy credit conditions. On the other hand, some analysts identify market dynamics that may amplify the effects of financial shocks and have the potential to generate self-reinforcing, downward financial and economic spirals. The Federal Reserve has used its traditional tools to avert such an outcome: it has lowered short-term interest rates dramatically and injected billions of dollars into the banking system to support market liquidity and keep credit flowing. In addition, the Fed has expanded its sphere by making funds available to securities firms, which it does not regulate, and has provided funding to underwrite the rescue-through-acquisition of Bear Stearns, a leading investment bank. The duration of the current instability is in marked contrast to financial shocks of recent decades -- stock market crashes, bond market disruptions, the 9/11 attacks -- when the central bank was able to contain market problems quickly with little or no interruption of U.S. economic growth. Depending on how soon normal market conditions are restored, and at what cost, policy makers may consider whether regulators have access to adequate information about market conditions, and whether currently unregulated market participants should be subjected to disclosure and reporting requirements. In addition, the social costs of failed financial speculation may be judged great enough to warrant new restrictions designed to lower the incidence of losses that have system-wide impacts or to put the markets and the economy in a better position to weather such shocks.
Author: Financial Crisis Inquiry Commission
Publisher: Cosimo, Inc.
ISBN: 1616405422
Category : Political Science
Languages : en
Pages : 692
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Book Description
From the Publisher: In the wake of the most significant financial crisis since the Great Depression, the President signed into law on May 20, 2009, the Fraud Enforcement and Recovery Act of 2009, creating the Financial Crisis Inquiry Commission. The Commission was established to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." The 10 members of the bi-partisan Commission, prominent private citizens with significant experience in banking, market regulation, taxation, finance, economics, housing, and consumer protection, were appointed by Congress on July 15, 2009. The Chair, Phil Angelides, and Vice Chair, Bill Thomas, were selected jointly by the House and Senate Majority and Minority Leadership. The FCIC is charged with conducting a comprehensive examination of 22 specific and substantive areas of inquiry related to the financial crisis. These include: fraud and abuse in the financial sector, including fraud and abuse towards consumers in the mortgage sector; Federal and State financial regulators, including the extent to which they enforced, or failed to enforce statutory, regulatory, or supervisory requirements; the global imbalance of savings, international capital flows, and fiscal imbalances of various governments; monetary policy and the availability and terms of credit; accounting practices, including, mark-to-market and fair value rules, and treatment of off-balance sheet vehicles; tax treatment of financial products and investments; capital requirements and regulations on leverage and liquidity, including the capital structures of regulated and non-regulated financial entities; credit rating agencies in the financial system, including, reliance on credit ratings by financial institutions and Federal financial regulators, the use of credit ratings in financial regulation, and the use of credit ratings in the securitization markets; lending practices and securitization, including the originate-to-distribute model for extending credit and transferring risk; affiliations between insured depository institutions and securities, insurance, and other types of nonbanking companies; the concept that certain institutions are 'too-big-to-fail' and its impact on market expectations; corporate governance, including the impact of company conversions from partnerships to corporations; compensation structures; changes in compensation for employees of financial companies, as compared to compensation for others with similar skill sets in the labor market; the legal and regulatory structure of the United States housing market; derivatives and unregulated financial products and practices, including credit default swaps; short-selling; financial institution reliance on numerical models, including risk models and credit ratings; the legal and regulatory structure governing financial institutions, including the extent to which the structure creates the opportunity for financial institutions to engage in regulatory arbitrage; the legal and regulatory structure governing investor and mortgagor protection; financial institutions and government-sponsored enterprises; and the quality of due diligence undertaken by financial institutions. The Commission is called upon to examine the causes of major financial institutions which failed, or were likely to have failed, had they not received exceptional government assistance. In its work, the Commission is authorized to hold hearings; issue subpoenas either for witness testimony or documents; and refer to the Attorney General or the appropriate state Attorney General any person who may have violated U.S. law in relation to the financial crisis.
Author: Dick K. Nanto
Publisher: DIANE Publishing
ISBN: 1437919847
Category : Business & Economics
Languages : en
Pages : 127
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Book Description
Contents: (1) Recent Developments and Analysis; (2) The Global Financial Crisis and U.S. Interests: Policy; Four Phases of the Global Financial Crisis; (3) New Challenges and Policy in Managing Financial Risk; (4) Origins, Contagion, and Risk; (5) Effects on Emerging Markets: Latin America; Russia and the Financial Crisis; (6) Effects on Europe and The European Response: The ¿European Framework for Action¿; The British Rescue Plan; Collapse of Iceland¿s Banking Sector; (7) Impact on Asia and the Asian Response: Asian Reserves and Their Impact; National Responses; (8) International Policy Issues: Bretton Woods II; G-20 Meetings; The International Monetary Fund; Changes in U.S. Reg¿s. and Regulatory Structure; (9) Legislation.
Author: Mine Aysen Doyran
Publisher: Routledge
ISBN: 1351936468
Category : Business & Economics
Languages : en
Pages : 257
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Book Description
How does America manage crisis on behalf of international finance in the absence of a global state? Doyran explores the relationship between state power and global finance and in particular examines the various attempts by the US state at financial crisis management. The case studies highlight the dramatic consequences of the rise of financial capitalism in the US economy, and also explore regulatory sources of market failures, systemic risk and moral hazard. This book focuses on this primary issue facing scholars of American power in various social science disciplines, including political science, finance and international relations, professional financial analysts and Government officials. This book is for the critical reader who is interested in financial policy and wants to learn more about the causes and consequences of the rise of financial markets.
