Protecting Financial Markets: Lessons from the Subprime Mortgage Meltdown | Zendy

Steven L. Schwarcz | Zendy

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Protecting Financial Markets: Lessons from the Subprime Mortgage Meltdown

Author(s) -

Steven L. Schwarcz

Publication year - 2007

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.1056241

Subject(s) - collateralized mortgage obligation , commercial mortgage backed security , financial system , secondary mortgage market , business , mortgage underwriting , shared appreciation mortgage , mortgage insurance , subprime mortgage crisis , securitization , structured finance , finance , economics , financial crisis , casualty insurance , insurance policy , macroeconomics

Why has the recent subprime mortgage meltdown undermined financial market stability notwithstanding the protections provided by market norms and financial regulation? This article attempts to answer that question by identifying anomalies and obvious protections that failed to work, and then testing hypotheses that might explain the anomalies and failures. The resulting explanations provide critical insights into protecting financial markets.

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