Alternative View of the Current (2008) Crisis in the US Financial System

22 Pages Posted: 25 Jun 2008 Last revised: 21 Jul 2008

See all articles by Peter Lerner

Peter Lerner

Wenzhou-Kean University - Wenzhou Kean Business School

Date Written: June 23, 2008

Abstract

In my essay, I formulate an alternative scenario for the current crisis of the US financial system. Unintended and poorly understood consequences of the Gramm-Leach-Bliley (1999) banking reform and, especially, the Bankruptcy Abuse Prevention and Consumer Protection Act (2005) created numerous perverse incentives in the US financial industry.

I argue that the trigger for the financial collapse was the refinancing of the short-term consumer debt through home equity loans.

Keywords: Real estate, crisis, contagion

JEL Classification: D12, H30, H31, R31

Suggested Citation

Lerner, Peter, Alternative View of the Current (2008) Crisis in the US Financial System (June 23, 2008). Available at SSRN: https://ssrn.com/abstract=1150512 or http://dx.doi.org/10.2139/ssrn.1150512

Peter Lerner (Contact Author)

Wenzhou-Kean University - Wenzhou Kean Business School ( email )

Kean University (ret.)
Wenzhou, China
Union City, NJ Wenzhou 07083
China

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
524
Abstract Views
1,670
rank
59,856
PlumX Metrics