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Wednesday, January 21, 2015

Low-Income Loans Didn't Cause the Financial Crisis

At MoneyWatch:

Low-income loans didn't cause the financial crisis, by Mark Thoma: What caused the housing bubble and collapse of the financial system? Many fingers have pointed to a lack of regulation, financial innovation that didn't live up to its promises of risk-sharing and risk-reduction, and low interest rates from the Fed, which created an excess of liquidity.
Another cause that's often cited says the financial crisis was the result of government pressure to make subprime home loans to those at the lower end of the income scale. But recent work from the National Bureau of Economic Research provides no support for that claim. ...

    Posted by on Wednesday, January 21, 2015 at 09:35 AM in Economics, Housing, Income Distribution, MoneyWatch | Permalink  Comments (26)


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