5902.docx - Excessive borrowing under too loose credit standards is one of the characteristics of the US mortgage bubble Credit flooding has led to a

5902.docx - Excessive borrowing under too loose credit...

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Excessive borrowing under too loose credit standards is one of the characteristics of the US mortgage bubble. Credit flooding has led to a large number of subprime mortgages ( subprime loans ), and investors believe that these high-risk loans will be mitigated by asset securitization . The damage caused by the failed asset securitization plan swept the housing market and its enterprises, and then A subprime mortgage crisis has triggered. This crisis has caused a larger number of silver masters to be sold by banks in the market. The supply of these excess homes has caused the prices of surrounding houses to fall sharply, making them vulnerable to auctions or abandoned by the courts. This result has laid the foundation for the future financial crisis. Initially, the affected companies were limited to companies that were directly involved in building and subprime lending, Then, the crisis began to affect ordinary credits that were not related to real estate, and in turn affected large financial institutions that were not directly related to mortgages. Most of the assets owned by these institutions are derived from the benefits associated with mortgages. These securities, which are mainly subject to credit loans, or credit-derived goods , were originally used to ensure that these financial institutions are free from bankruptcy. However, due to the subprime housing credit crisis, members affected by these credit derivatives have increased, including Lehman Brothers . Failures of corporate governance and risk management at many systemically important financial institutions are among key causes of the crisis, as concluded by the Commission. Many large financial institutions took on significant amounts of risk with limited capital and a large dependence on short-term funding. These institutions increasingly focused on risky activities that would result in large payoffs, such as acquiring and supporting subprime lenders in creating and selling trillions of dollars in mortgage-related securities. Additionally, mathematical models were over-relied
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