THE CONSEQUENCES OF THE SUBPRIME MORTGAGE MARKET CRISIS FOR THE POLISH ECONOMY

Kornelia Gierczynska and Andrzej Wojciechowski
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Kornelia Gierczynska: Nicolaus Copernicus University
Andrzej Wojciechowski: Nicolaus Copernicus University

Equilibrium. Quarterly Journal of Economics and Economic Policy, 2009, vol. 2, issue 1, 9-16

Abstract: In March 2008 the situation on the subprime mortgage market was dubbed a crisis. Many companies collapsed, including New Century Financial Corporation – the biggest credit company in the United States. Within the next few months this virus infected other countries, also Poland. The purpose of this article is to show the background of the subprime mortgage market crisis and its prospectus influence on Polish economy. The first part is trying to find out causes and future course of this financial breakdown. In the first part the author is mainly focused on subprime loans and their significance for the crisis. Next, the author goes on to look at the information regarding the main channels of infestation, the securitization of the debt by the banks and the sale of the securities to the investors all over the world. The following chapter contains the data about the impact that the crisis has on the Polish economy, including GDP growth rate and what would likely happen on the real estate market and stock exchange. Polish banking and mortgage systems are sounder then American, thus, there is no risk of insolvency, yet we do bear the consequences of the financial crash. By the end of the article the author concludes that, in the globalized world, financial markets are linked and it is impossible to remain unaffected by a crisis that is taking place on the other side of the globe.

Keywords: subprime crisis; Polish economy (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pes:ierequ:v:2:y:2009:i:1:p:9-16

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