Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/29964
Authors: 
Orlowski, Lucjan T.
Year of Publication: 
2008
Series/Report no.: 
IWH Discussion Papers 11/2008
Abstract: 
This study argues that the severity of the current global financial crisis is strongly influenced by changeable allocations of the global savings. This process is named a "wandering asset bubble". Since its original outbreak induced by the demise of the subprime mortgage market and the mortgagebacked securities in the U.S., this crisis has reverberated across other credit areas, structured financial products and global financial institutions. Four distinctive stages of the crisis are identified: the meltdown of the subprime mortgage market, spillovers into broader credit market, the liquidity crisis epitomized by the fallout of Bear Sterns with some contagion effects on other financial institutions, and the commodity price bubble. Monetary policy responses aimed at stabilizing financial markets are proposed.
Subjects: 
subprime mortgage crisis
credit crisis
market risk
credit risk
default risk
Level 3 assets
Basel II
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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