Question by James L: What deregulation caused the housing bubble and financial crisis? Everyday, the newspapers blame deregulation and laissez faire public policy, yet they never specify what deregulation actually caused the crisis. What regulation was repealed and what regulation is needed? Do they want regulation of independent mortgage lenders? What do they propose? Please don't turn this discussion into capitalism vs. socialism or something like that. I simply want specifics. It is all very complicate so you don't have to explain everything to me, but just point me in the right direction and I'll do the research myself. Best answer for What deregulation caused the housing bubble and financial crisis?:
Answer by 60187guy
1) Less-creditworthy people who weren't able to borrow money for mortgage loans during the 1990's were made able to borrow during this decade. This is the origin of the "sub-prime" problem. 2) Financial institutions were able to engage in more aggressive and leveraged types of speculative trading because of diminished regulatory oversight which brought about some of the meltdown in the stock market.
Answer by lorax101
Hmm... there's a lot of deregulation in there (coming from a college student who just came out of a regulations in economics course). A lot of it has to do with economic thought in the last couple decades (Chicago School of Economics http://en.wikipedia.org/wiki/Chicago_school_of_economics ) Legislators in general have relied on economists who have pointed out that the self-interest of each firm in an industry will lead to a stable market, and all governments can do is get in their way. So after heavy regulation in the 60's and 70's, legislators have been taking a lot of regs off the books - to point you in some specific directions of research: http://en.wikipedia.org/wiki/Panic_of_1907 http://en.wikipedia.org/wiki/Antitrust http://en.wikipedia.org/wiki/Law_and_economics I've got some more research that you might want to do, but it's a little more economist scholar oriented. Send me an email if you'd like to scan through it anyways. Newspapers blaming the current crisis on "deregulation and laissez faire public policy" without specifications is just the easy thing to do - they're the best buzzwords of the season.
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Lenders have also been tightening their borrowing criteria in recent months and raising their rates for new borrowers and more than a million existing ones, blaming the weak economy and the increased cost of funding a mortgage. The Bank of England ... Mortgage approvals hit 15-year low
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1 komentar:
And I think going for independent mortgage advice also allows you to have lots of information at once put in front of you so you can see all your options.
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