Oversizing of the subprime mortgage market as the main cause of its fall

Dejan Živkov, Ivan Pavkov
2012 Škola Biznisa  
The U.S. subprime mortgage crisis was one of the first indicators of the great financial crisis that escalated in late 2008. The law deregulation and human greed are considered to be the main causes of the crisis. However, some recent analyses have shown one more cause of the mortgage crisis, that seems to be crucialoversizing of the subprime mortgage market. Due to the fact that the subprime mortgage market depends on the prime mortgage market, in an attempt to provide its stability and
more » ... tability and sustainble growth, some kind of the ratio between the number of subprime and the prime mortgages must have been taken into the consideration. Keywords: subprime mortgage crisis, ratio between number of subprime and prime mortgages.
doi:10.5937/skolbiz1203058z fatcat:dlpmrqaj2vfprhkeg6xtftdymm