US SUBPRIME MORTGAGE CRISIS AND GLOBAL FINANCIAL CRISIS, 2008–2009: A SHORT HISTORY

Donghyun Park

Chapter 61 in Capitalism in the 21st Century:Why Global Capitalism Is Broken and How It Can Be Fixed, 2019, pp 279-284 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Within the broader worldwide wave of growing disenchantment with and hostility to capitalism, one industry in particular has been singled out as the root of all evil. That industry is the global financial industry, epitomized by Wall Street in New York and The City in London. Criticism of Goldman Sachs, J.P. Morgan, Citibank, and the financial industry in general has grown louder by quite a few decibels since the Global Financial Crisis of 2008–2009. That crisis originated from the US subprime mortgage crisis and almost paralyzed the US financial system, before spreading like wildfire across the Atlantic and paralyzing the European financial system. In a nutshell, US banks and other US financial institutions were lending large amounts of money to subprime borrowers — i.e. borrowers with poor credit histories and low creditworthiness — to buy homes. To put it bluntly, the banks were giving out mortgage loans to homebuyers who should not be buying homes…

Keywords: Capitalism; Globalization; Inequality; Entrepreneur; Financial Industry; Government; Socialism; Market (search for similar items in EconPapers)
JEL-codes: A1 F00 F6 N2 P16 (search for similar items in EconPapers)
Date: 2019
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