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THE CREDIT CRUNCH: WHOSE FAULT WAS IT ANY WAY - Coggle Diagram
THE CREDIT CRUNCH: WHOSE FAULT WAS IT ANY WAY
Key events
Banks had bought subprime debt
Housing bubble burst in 2006
Subprime borrowers defaulted
Subprime banks went bankrupt
Interest rates rose in mid-2000s
2007 Events
Banks declared losses
Gov intervened to increase credit
Banks wouldn't lend to each other
2009 Events
Deepest recession since WWII
Banks still undercapitalized
Gov provided support
Auto companies went bankrupt
Conclusion
Banks, regulators, gov to blame
Lack of oversight and risk controls
Causes
Lack of regulation
Gov policies fueled bubble
Risky bank investments
Ratings agencies failures
2008 Events
Major banks went bankrupt
Huge bailouts provided
Gov tried limiting crisis
Recession declared