PHL295H1 Lecture Notes - Dot-Com Bubble, Bear Stearns, Public Utility
Document Summary
Interlude: the 2008 financial crisis (financial ethics) (continued) 2007- landslide begins: the financial market could not solve the subprime crisis (the recession) on its own and the problems spread across us: the interbank market froze largely due to prevailing fear of the unknown banks. 2008- the failure of cdo tranches- those tranches now began to fail by the hundreds: bear stearns: gets fed funding as shares plummet. The financial crisis of 2008 has taught us that the confidence of the financial market, once shattered cannot be quickly restored. A liquidity crisis can very quickly turn into a solvency crisis for financial institutions. Some agents are internal in the firm and some agents are external in the firm. Governments imposes specific rights and services- can charge a specific rate and provide services. Constraints power to employees- employees relations: people are willing to engage in these businesses, these constraints are common today. Who should be the trustees of business.
