How do you think the rise in subprime lending contributed to the credit crunch ?

Geography

1 answer:

Aneli [31]4 years ago

8 0

Answer:

Subprime lending is the practice of lending to borrowers who have poor credit-ratings. In other words, borrowers who are very likely to default on their debts.

Explanation:

With the expansion of subprime leding due to expansionary fiscal and monetary policies, banks got many risky assets that created a bubble. The bubble burst out and generated the Great Recession of 2007-2008.

Because so many clients could not pay their debts, banks saw their assets diminish while their liabilities rose quickly. This not only led to a credit crunch due to the poor financial health of the banks, but also the loss of viability for many banks. This is why the government had to step in, and in conjunction with the Federal Reserve, provide billions of dollars in relief for financial institutions.

You might be interested in

Explain how an igneous rock like granite changes into a sandstone?

Leokris [45]

Answer:

Granite changes into sandstone by means of weathering and erosion. Through the passage of time, fragments of granite are broken down into smaller pieces, or sediments, which are transported and deposited at the bottom of the oceans or rivers. These particles form layers of sand and pebbles that undergo compaction and cementation to create sandstone.

3 0

3 years ago

HELP!!! 50 POINTS What if the United States, Mexico, and Canada took the EU's example and joined to form a North American Union?

Serggg [28]

Answer:

A North American Union, by EU's example, would mean that the US, Canada, and Mexico will function as one in many ways. The borders will be open, both for economic actions and for free movement of people. While this may seem good at first sight, it will actually cause some major problems as well. The US and Canada will face a major population increase in a very short period of time. The people from Mexico will rush to move into these two countries because of better living conditions and more job opportunities, which in turn will cause massive depopulation in Mexico. On one side, Mexico will face major economic problems because of a sharp decline in its labor force, while on another side, the people in the US and Canada will face problems because there will be tens of millions of new laborers that will offer their services for lower wages. This will lead to tens of millions of people losing their jobs or not being able to find j

Explanation:

6 0

3 years ago

Which type of hard stabilization increases beach erosion? CHOOSE ALL THAT APPLY.BreakwaterGroinBeach nourishmentJettyBerm

Vikki [24]

Answer:

Groin
Jetty

Explanation:

The Groins are hard structures and used to maintain uplift beaches as to restrict longshore sediment transportation form tasking place. Are meant to capture sand transportation by the currents.

While the jetty is another type of shore perpendicular structure that is placed adjacent to the tidal inlets and controls the inlet migration. Both of them are used to destabilize coastal systems and disrupt the natural sediment regimes.

8 0

3 years ago

Do clouds always lead to rain ? Explain

serg [7]

Answer:

No clouds do not always lead to rain

Explanation:

Because, it could be partly sunny which would be sunny with a few clouds.

Dark clouds lead to rain or a thunder storm.

4 0

3 years ago

Read 2 more answers

What city does the meridian pass directly through

tamaranim1 [39]

Hello,

Here is your answer:

The proper answer to this question is "Greenwich,England".

Here is how:

The prime minister thought that the longitude was observatory which is why he decided the pass all the way through.

Your answer is Greenwich,England!

If you need anymore help feel free to ask me!

Hope this help!

7 0

3 years ago