The crash sonata in D major

Giorgio Szego

Journal of Risk Management in Financial Institutions, 2010, vol. 3, issue 1, 31-45

Abstract: The current us-made financial crisis has been exacerbated by the mark-to-market rule, by pro-cyclical bank capital requirements, by fragility in the originate-to-distribute system, and by the volume of fraudulent mortgages in the usa, which have distorted profit and loss distributions and confounded all prediction models. the monetary value of such frauds in 2006–07 is estimated to reach $100–120bn. like most crises since the 1980s, the present one is also due to regulatory mistakes, excessive leverage and concentration in real estate investments. while previous crises tended to be localised, the most recent turmoil has unfortunately had a global impact.

Keywords: financial crisis; regulatory debacle; frauds (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2010
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