m2l2 - C. The Rationality Irrationality of Wall Street 1....

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LECTURE TWO: THE FINANCIAL CRISIS: CAUSES, CONSEQUENCES, AND POLICY RESPONSES A. Market failures and public policy failures B. The causes of the financial crisis 1. Weak government regulation 2. Irresponsible decisions by home purchases and owners 3. Lax mortgage lending practices 4. Purchases of loans by financial institutions 5. Speculation by financial institutions 6. The role of credit rating agencies 7. low interest rates
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LECTURE TWO: THE FINANCIAL CRISIS: CAUSES, CONSEQUENCES, AND POLICY RESPONSES
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Unformatted text preview: C. The Rationality Irrationality of Wall Street 1. animal spirits run amuck 2. irrational exuberance, the herd effect, 3. Bubbles and musical chairs 4. Lack of trust and understanding 5. Executive Compensation D. The Policy Response: Dodd-Frank: 2,319 pages 1. Oversight of systematic risk 2. Regulation of insurance companies and investment firms 3. Controls over financing by capital markets 4. Establishes the Bureau of Consumer Financial Protection...
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m2l2 - C. The Rationality Irrationality of Wall Street 1....

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