18 Questions
What was the approximate amount of taxpayers' money injected into the financial system to prevent a crisis in 2008?
700 billion Dollars
Which financial institutions were heavily invested in mortgage-backed securities and CDOs?
Banks from the United States and Europe
What was one of the regulatory changes introduced as a result of the 2008 crisis?
BASEL-III guidelines
What is the criticism of the BASEL-III guidelines, according to the author?
They only apply to banks, not financial markets
Why did banks from around the world participate in the mortgage-backed securities and CDO markets?
Because they were attracted to the high returns during the boom period
What is the current state of financial markets, according to the author?
They are intrinsically unregulated entities
What was the primary reason behind the bankruptcy of AIG?
Insolvency due to excessive writing of credit default swaps
What was the primary motivation behind the widespread issuance of subprime mortgages?
To provide higher returns on financial assets during a period of falling interest rates
What was the total loss estimated to have exceeded during the 2007-2008 financial crisis?
700 billion US Dollars
Which institution played a crucial role in bailing out the banks during the 2007-2008 financial crisis?
The Federal Reserve
What was the underlying cause of the 2007-2008 financial crisis, according to the text?
Excessive greed and avarice in the financial industry
What was the consequence of the failure of mortgage-backed securities, according to the text?
A massive call on AIG to pay up on its credit default swaps
What was the main outcome of the 2009 Supervisory Capital Asset Program (SCAP) in the United States?
Almost 50% of banks were declared to have inadequate capital
Which act was implemented in 2010 in the United States as a response to the 2008 financial crisis?
Dodd Frank Act
What is the purpose of the Comprehensive Capital Analysis and Review (CCAR) in the United States?
To report stress test scenarios and results to the banking regulator
What is the minimum asset threshold for banks to be considered 'too big to fail' in the United States?
100 billion U.S. dollars
How many banks failed the 2014 stress test conducted by the European Banking Authority?
25 banks
What is the main objective of stress testing in the banking industry?
To assess the adequacy of capital in banks under stressed macroeconomic conditions
Learn about the 2008 financial crisis, where billions of taxpayers' money was injected into the financial system to avert a catastrophe. Discover how banks globally, especially in Europe, were involved in the purchase of mortgage-backed securities and CDOs.
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