The U.S. sub-prime crise developed in the last few months as a dangerous syncope for the entire international financial system, recall for the rethinking of market functionality, revealing the international institutional weakness in financial system supervision on global scale. The mortgage volatility induced by the international dereglementation and derivates contemporary burst, correlated with a relaxed supervision framework, transformed progressively the credit market into a system “bubble”, making possible the distortion of real estates values toward those levels forced by creditors. Throughout a weakness chain, many financial institutions, determined by a savage competition on this sector, left away the prudence and borrowed money from different investors, guarantying the long terms transactions, with short time derivates from speculative short-term market, supplying the bubble. In this context, the paperwork is meant to recall for reinventing the risks models, so that the crises to be anticipated earlier than its development moment.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
13368.
Length: Date of creation: 03 Nov 2008 Date of revision: Publication status: Published in Knowledge Based Organization 2008 International Conference, November 2008, Sibiu, Romania ISSN 1843-6722.3(2008): pp. 278-282 Handle: RePEc:pra:mprapa:13368
Find related papers by JEL classification: F59 - International Economics - - International Relations and International Political Economy - - - Other E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
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