NatWest and the legacy of the financial crash
Автор: G Conomics
Загружено: 2021-05-17
Просмотров: 155
Financial Times: wb 17 May 2021
UK government to sell next £1bn stake in NatWest
https://www.ft.com/content/66e6fe99-9...
Specification: Financial markets
1. The article refers to the ‘US subprime mortgage market.’ Explain what is meant by a subprime mortgage.
2. The 2008 financial crash has its origins in the USA; however, it proved highly contagious. Explain the meaning of the term systemic risk.
3. Limited liability in a bank means that owners have an incentive to take risks. Explain what is meant by moral hazard.
4. Banks suffered a devastating decline in confidence and with that came the inevitable bank run (https://www.ft.com/content/5cfd82e8-1.... Explain what is meant by a bank run.
5. ‘Banks had become too big to fail, too big to sail, and too big to jail.’ Banks were bailed-out at great expense. Outline the measures subsequently introduced by the Bank of England to ensure that banks are strong enough to withstand another financial crisis, so-called stress testing (https://www.ft.com/content/f6f280c0-c....
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