Project Report on Subprime Crisis In USA

Submitted ByVirat Vaid (09/BBS/0064) in partial fulfillment of the III year in Bachelors of Business Studies

CONTENTS 1. INTRODUCTION The Breakdown of the Global Financial System Excessive Public Spending and Excessive Growth of Government

2. THE CAUSES OF THE SUB PRIME CRISIS Total US Federal Obligations Far Exceed the GDP of the Whole World Oversupply of US Dollars Distort Real Economy Oversupply of US Dollars Making Financial Institutions Lowering Lending Criteria Oversupply of US Dollars Contributing to the Soaring of Housing Prices Deregulation Opens Door for Sub Prime Lending Reckless Lending of Financial Institutions The Role of Mortgage Brokers in Promoting Loans to Sub-prime Borrowers The Role of Securitisation in Expanding Subprime Mortgages Over-emphasis of Homeownership and Lack of Oversight Driving Riskier Lending Rapid Increase of Subprime Mortgages Leading to Credit Crunch

3. IMPACTS OF THE SUB PRIME CRISIS 15 The Broken Dream of Homeownership Impact on Remittances Impact on Foreign Direct Investment Impact on International Trade Oversupply of Currencies Distorts the Real Economy and the Welfare of People The Rapid Increase of Unemployment

4. REFERENCES

ACKNOWLEDGEMENT

I would like to acknowledge the help and support of my Financial Management teacher Dr. Rakesh Kumar for helping me understand the end towards which or work could be directed.

References

1. Google 2. Wikipedia 3. Annual Financial Reports of the US Department of State.