Unformatted text preview: let them? 3. Based on Ross Levine’s Autopsy of the US Financial System , a. Why is Levine pessimistic about the proposed reforms to the financial sector? b. Credit rating agencies earned fees for packaging CDOs and earned further fees for rating the CDOs. Was this “conflict of interest” due to policy-makers lack of information or lack of regulatory power? Explain c. Why are credit default swaps (CDS) not insurance policies? d. What did the Fed allow banks to do in 1996 that had a big effect on banks’ balance sheets? e. What entities did the SEC supervise? f. Which 3 policies did the SEC implement in 2004-08 that weakened its supervision. Whys did the SEC do this? g. How did Fannie Mae and Freddie Mac facilitate the expansion of the subprime lending market? h. Why sis Congress allow the Fannie and Freddie to do this?...
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- Fall '10
- central banks, Subprime mortgage crisis, credit rating agencies