Finance

Poor ECB Policy turned a bank crisis into a Sovereign Debt crisis, 2007-2015 Prosperity Built on Sand Spain in 2007 epitomized successful European integration. Budget surplus of 1.9% of GDP, public debt below 40%, AAA credit rating, 7.95% unemployment—the lowest since 1978—and 3.8% GDP growth painted a picture of economic triumph. Between 1997 and 2007, … Read more

Abstract This paper challenges the conventional narrative that government-sponsored enterprises (GSEs) and affordable housing policies caused the 2008 financial crisis. Through detailed analysis of the origination, securitization, and distribution chain, I demonstrate that private-label mortgage-backed securities and the unregulated credit default swap market were the primary drivers of the crisis. The evidence shows that toxic … Read more