" (Shiller, 6)
It is important to understand that institutional reforms imply providing a robust framework wherein our financial markets and real estate could function. Regardless of how powerful as well as "technologically sophisticated the train is, it is only as good as the track on which it runs." (Shiller, 7) Insurance, regulatory as well as pension institutions are metaphorically the track which carries our real estate and financial markets. However these prevailing institutions dealing with risk-management have become aged as well as unstable. Figuratively, we are 'running bullet trains' on the old tracks. Our policy makers in government as well as in the business need to renovate and remove the rails. The solution in sub-prime relates to institutional reforms: 'the vision to' look over 'short-term fixes' and the guts to embark on reforms at the apex level. (Shiller, 7-8)
Foreclosure:
The 'mortgage mess' caught the public attention wherein a sharp spurt with regard to home foreclosures in the year 2006 spiraled apparently beyond control during the year 2007, setting off a financial...
which became a global issue within a single year. Along with it, there was a decline in consumer spending, fall of the housing market, foreclosure numbers went on rising and the stock market was down. The sub-prime crisis and the ensuing foreclosure have engendered dissension among the lenders, consumers as well as legislators. (Bianco, 2)
References
Bianco, Katalina. M. The Sub-prime Lending Crisis: Causes and Effects of the Mortgage
Meltdown. 2008. http://business.cch.com/bankingfinance/focus/news/Subprime_WP_rev.pdf
Davis, Kevin. Enhancing Risk Management and Governance in the Region's Banking System to Implement Basel II and to Meet Contemporary Risks and Challenges Arising from the Global Banking System: Lessons from the Sub-Prime Crisis. Training Program. 8-12 December 2008. http://www.apec.org.au/docs/08_TP_BRM/2.2_Davis.pdf
Felsenheimer, Jochen; Gisdakis, Philip. Credit Crisis.
Wiley-VCH, 2008.
Shiller, Rogert J. The Sub-prime solution.
Princeton University Press. 2008.
