EconPapers    
Economics at your fingertips  
 

The Subprime Panic

Gary Gorton

European Financial Management, 2009, vol. 15, issue 1, pages 10-46

Abstract: "Understanding the ongoing credit crisis or panic requires understanding the designs of a number of interlinked securities, special purpose vehicles, and derivatives, all related to subprime mortgages. I describe the relevant securities, derivatives, and vehicles to show: (1) how the chain of interlinked securities was sensitive to house prices; (2) how asymmetric information was created via complexity; (3) how the risk was spread in an opaque way; and (4) how trade in the ABX indices (linked to subprime bonds) allowed information to be aggregated and revealed. These details are at the heart of the origin of the Panic of 2007. The events of the panic are described." Copyright (c) 2008 The Author Journal compilation (c) 2008 Blackwell Publishing Ltd.

Date: 2009
References: Add references at CitEc
Citations View citations in EconPapers (22) Track citations by RSS feed

Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-036X.2008.00473.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Subprime Panic (2008) Downloads
Working Paper: The Subprime Panic (2008) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:bla:eufman:v:15:y:2009:i:1:p:10-46

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1354-7798

Access Statistics for this article

European Financial Management is currently edited by John Doukas

More articles in European Financial Management from European Financial Management Association
Contact information at EDIRC.
Series data maintained by Wiley-Blackwell Digital Licensing ().

 
Page updated 2014-07-18
Handle: RePEc:bla:eufman:v:15:y:2009:i:1:p:10-46