Protecting Financial Markets: Lessons from the Subprime Mortgage Meltdown
35 Pages Posted: 6 Dec 2007 Last revised: 24 Feb 2008
Date Written: November 2007
Why has the recent subprime mortgage meltdown undermined financial market stability notwithstanding the protections provided by market norms and financial regulation? This article attempts to answer that question by identifying anomalies and obvious protections that failed to work, and then testing hypotheses that might explain the anomalies and failures. The resulting explanations provide critical insights into protecting financial markets.
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