Subprime crisis
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Subprime Crisis:
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This solution helps explore the subprime crisis within the context of financial distress.
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Subprime Crisis
The subprime crisis which began in early 2007 is considered as one of the most important event in the financial and economic market in the last couple of decades. It was primarily because of this crisis, that the US economy has gone in recession. This started when the financial companies gave loans to individuals with unstable incomes or low creditworthiness with an expectation of high margins. Also with the boom in real estate the financial companies reduced the contribution of the owner to finance the property. Historically it was a practice that 25% to 30% of the total cost of the property was brought in by the owner and the remaining was financed by the bank keeping the property as mortgage, however, there was a constant shift in the owners percentage which finally led to the subprime crisis.
Another party responsible for this whole crisis was the ratings agencies. During the last few years it was observed that these rating agencies were ...
Education
- Chartered Accountant (Equivalent to CPA in US), Institute of Charted Accountants of India
- Bachelor of Commerce, West Bengal University
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