2007 Financial Crisis

Topics: Monetary policy, Federal Reserve System, Central bank Pages: 12 (3372 words) Published: June 22, 2013
Section One To be completed by the studentPlease tick as appropriate
Name (s) Ospina, Juan FranciscoMBA PT □ MSc □ Diploma □ Certificate □
Specialization MBA
Intake n° 5
Student ID Number (s) 122582 Grenoble Campus □ Off site (state which one) X
Subject: International Macroeconomics …London………………… Assignment X Oral Presentation □ Exam □ 1. Title: International Macroeconomics- Was faulty monetary policy responsible for the 2007 US subprime financial crisis? I hereby declare that the attached assignment is my own work and understand that if I am suspected of plagiarism or other form of cheating; my work will be referred to the Disciplinary Committee which may result in my exclusion from the program.

Signature Juan Francisco OspinaDate 05 / 02 / 2013
Section One To be completed by the studentPlease tick as appropriate
Name (s) Ospina, Juan FranciscoMBA PT □ MSc □ Diploma □ Certificate □
Specialization MBA
Intake n° 5
Student ID Number (s) 122582 Grenoble Campus □ Off site (state which one) X
Subject: International Macroeconomics …London………………… Assignment X Oral Presentation □ Exam □ 2. Title: International Macroeconomics- Was faulty monetary policy responsible for the 2007 US subprime financial crisis? I hereby declare that the attached assignment is my own work and understand that if I am suspected of plagiarism or other form of cheating; my work will be referred to the Disciplinary Committee which may result in my exclusion from the program.

Signature Juan Francisco OspinaDate 05 / 02 / 2013 Comment Form for Assessed Work – Grenoble Graduate School of Business

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Table of Content

Introduction………………………………………………………………….……………..……….. 3 Overview of the 2007 US Financial Crisis…...………………………………………………….3 What is Monetary Policy?....………………………………………………………………………4 Chronology of US Monetary Policy around 2007 Financial Crisis……………………………5 Causes of the 2007 US subprime financial crisis…………………..……………………………8 Conclusion…………………………………………………………………………………………….9 References…………………………………………………………………………………………….10

Was faulty monetary policy responsible for the 2007 US subprime financial crisis? Introduction

Many articles have been written about the causes of the 2007 US subprime financial crisis and the lack of regulation by the government to the country’s main financial actors’ practices and the US monetary policy are pointed out as determining factors that germinated the crisis. This paper focuses particularly in the relationship of US monetary policy and the 2007 subprime financial crisis and seeks to determine if whether it was a cause of the crisis or not.

A description of the 2007 US Financial Crisis is exposed and detailed explanation of what monetary policy means and its scope is provided. Monetary policy has been a determining factor for US...

References: D. E. Moggridge and Susan Howson, (1974). Keynes on Monetary Policy, 1910-1946.
Oxford Economic Papers. Oxford University Press. Oxford, UK.
"Federal Open Market Committee:About the FOMC". Board of Governors of the Federal Reserve System. Federal Reserve. February 18, 2009.
Dr. Mary J. McGlasson, is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. (2009) (Macro) Episode 32: Monetary Policy.
"The Implementation of Monetary Policy". The Federal Reserve System: Purposes & Functions. Washington, D.C.: Federal Reserve Board. 24 August 2011
Jarvis, Jonathan (2009). The Short & Simple Story of the Credit Crisis. Crisisofcredit.com.
Lothian, James R. (2009). U.S. Monetary Policy and the Financial Crisis. The Journal of Economic Asymmetries. Fordham University. New York.
Nelson, Edward. (2007). Milton Friedman and U.S. Monetary History: 1961-2006. Federal Reserve Bank of St. Louis Review, May/June 2007.
Jickling, Mark. (2010). Causes of the Financial Crisis. The Congressional Research Service. USA.
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