Inside Job Report
"Inside Job" is a 2010 documentary film about the financial meltdown of 2008 directed by Charles H. Ferguson. The film successfully answers the question "How did the housing bubble burst?" by exploring the changes in the policy environment as well as the banking practices helped create the financial crisis.
The film focuses on changes in the financial industry in the decade leading up to the crisis, the political movement toward deregulation, and how the development of complex trading such as the derivatives market allowed for large increases in risk taking that circumvented older regulations that were intended to control systemic risk. Within the derivatives market, the film contends that the high risks that began with subprime lending were transferred from investors to other investors who, due to questionable rating practices, falsely believed that the investments were safe. Thus, lenders were pushed to sign up mortgages without regard to risk, or even favoring higher interest rate loans, since, once these mortgages were packaged together, the risk was disguised. Another point is the high pay in the financial industry, and how it has grown in recent decades out of proportion to the rest of the economy. Even at the banks that failed, the film shows how bank executives were making hundreds of millions of dollars in the period immediately up to the crisis, all of which was kept, again suggesting that the risk/benefit balance has been broken.
By featuring research and extensive interviews with financiers, politicians, journalists, and academics; this documentary film reflects exactly how the banking system worked in the economy crisis. Beginning in the 1990s, deregulation and advances in technology led to an explosion of complex financial products, called derivatives. Economists and bankers claimed they made markets safer. But instead, they made them unstable. Using derivatives, bankers could gamble on virtually anything. They could bet on the rise or fall
The film focuses on changes in the financial industry in the decade leading up to the crisis, the political movement toward deregulation, and how the development of complex trading such as the derivatives market allowed for large increases in risk taking that circumvented older regulations that were intended to control systemic risk. Within the derivatives market, the film contends that the high risks that began with subprime lending were transferred from investors to other investors who, due to questionable rating practices, falsely believed that the investments were safe. Thus, lenders were pushed to sign up mortgages without regard to risk, or even favoring higher interest rate loans, since, once these mortgages were packaged together, the risk was disguised. Another point is the high pay in the financial industry, and how it has grown in recent decades out of proportion to the rest of the economy. Even at the banks that failed, the film shows how bank executives were making hundreds of millions of dollars in the period immediately up to the crisis, all of which was kept, again suggesting that the risk/benefit balance has been broken.
By featuring research and extensive interviews with financiers, politicians, journalists, and academics; this documentary film reflects exactly how the banking system worked in the economy crisis. Beginning in the 1990s, deregulation and advances in technology led to an explosion of complex financial products, called derivatives. Economists and bankers claimed they made markets safer. But instead, they made them unstable. Using derivatives, bankers could gamble on virtually anything. They could bet on the rise or fall