Title

Protecting Financial Markets: Lessons from the Subprime Mortgage Meltdown

Document Type

Article

Publication Date

2008

Subject Category

Banking and Finance

Abstract

Why did the recent subprime mortgage meltdown undermine financial market stability notwithstanding the protections provided by market norms and financial regulation? This article attempts to answer that question by identifying anomalies and obvious protections that failed to work, and then by examining hypotheses that might explain the anomalies and failures. The resulting explanations provide critical insights into protecting financial markets.