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BECN 305 : Major Presentation

BECN 305 : Major Presentation. By: Harshil Patel . The Subprime Financial Crisis. Introduction:- Financial Crisis Subprime Mortgages Driving Forces . Major Culprits!. Lenders -  Lent funds to people with poor credit and a high risk of default. 

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BECN 305 : Major Presentation

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  1. BECN 305 : Major Presentation By: HarshilPatel

  2. The Subprime Financial Crisis Introduction:- Financial Crisis Subprime Mortgages Driving Forces

  3. Major Culprits! • Lenders - Lent funds to people with poor credit and a high risk of default.  • Homebuyers-Playing an extremely risky game by buying houses they could barely afford. • Investment Banks- A lot of the demand for these mortgages came from the creation of assets that pooled mortgages together into a security, such as a collateralized debt obligation (CDO).

  4. Rating Agencies – They should have given CDOs poor rating instead of AAA • Investor- Investors were the ones willing to purchase these CDOs at ridiculously low premiums over Treasury bonds.

  5. Hedge Funds- a fund could purchase a lot more CDOs and bonds than it could with existing capital alone, pushing subprime interest rates lower and further fueling the problem.  • Politicians-They lessened restrictions on banks that underwrote the mortgages,

  6. Top Financial Companies Reported Losses from Subprime Mortgage Crisis • Citigroup: $40.7bn • UBS: $38bn • Merrill Lynch: $31.7bn • HSBC: $15.6bn • Bank of America: $14.9bn • Morgan Stanley $12.6bn • Royal Bank of Scotland: $12bn • JP Morgan Chase: $9.7bn • Washington Mutual: $8.3bn • Deutsche Bank: $7.5bn • Wachovia: $7.3bn • Credit Agricola: $6.6bn • Credit Suisse: $6.3bn • Mizuho Financial $5.5bn • Bear Stearns: $3.2bn • Barclays: $3.2bn

  7. Thank you!!!

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