Date of Award
2015
Document Type
Thesis
Degree Name
Bachelors
Department
Social Sciences
First Advisor
Coe, Richard
Keywords
Economics, Financial Crisis, Financial Industry
Area of Concentration
Economics
Abstract
The financial crisis of 2007-2008 has caused economic disruption on a scale not seen since the Great Depression. If further financial crisis are to be avoided, it is necessary to examine the causes of this financial crisis. In this financial crisis, the party found most responsible for causing the crisis is the financial industry itself. Credit rating agencies operating under a flawed incentive structure, mortgage companies focused on fee-generated income determined by the quantity of sold mortgages, and the overconfident banking industry all played their part in causing the financial crisis. While the government was found to have contributed to the crisis, this fact should not detract from the near total responsibility of the financial industry in causing the crisis. In allowing the financial industry to partly regulate itself, however, the federal government failed to provide a safe and sound financial system. A deregulatory philosophy informing government action, policies designed to increase homeownership, and an outdated regulatory framework unable to contend with modern financial markets all contributed to the financial crisis.
Recommended Citation
Thompson, Ian, "The Causes of the 2007-2008 Financial Crisis" (2015). Theses & ETDs. 5121.
https://digitalcommons.ncf.edu/theses_etds/5121