Questions from Financial Markets


Q: What is the shadow banking system, and why was it an

What is the shadow banking system, and why was it an important part of the 2007–2009 financial crisis?

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Q: Why would haircuts on collateral increase sharply during a financial crisis?

Why would haircuts on collateral increase sharply during a financial crisis? How would this lead to fire sales on assets?

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Q: How did the global financial crisis promote a sovereign debt crisis in

How did the global financial crisis promote a sovereign debt crisis in Europe?

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Q: How does the concept of asymmetric information help to define a financial

How does the concept of asymmetric information help to define a financial crisis?

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Q: How can a bursting of an asset-price bubble in the

How can a bursting of an asset-price bubble in the stock market help trigger a financial crisis?

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Q: How does an unanticipated decline in the price level cause a drop

How does an unanticipated decline in the price level cause a drop in lending?

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Q: Why do managers of financial institutions care so much about the activities

Why do managers of financial institutions care so much about the activities of the Federal Reserve System?

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Q: How can a decline in real estate prices cause deleveraging and a

How can a decline in real estate prices cause deleveraging and a decline in lending?

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Q: How does a deterioration in balance sheets of financial institutions cause a

How does a deterioration in balance sheets of financial institutions cause a decline in economic activity?

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Q: How does a general increase in uncertainty as a result of a

How does a general increase in uncertainty as a result of a failure of a major financial institution lead to an increase in adverse selection and moral hazard problems?

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