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Complete 6 pages APA formatted article: The Role of Banks: Subprime Mortgages. The United Bank of Switzerland predicted that global recession was very close and the global economy would require more t
Complete 6 pages APA formatted article: The Role of Banks: Subprime Mortgages. The United Bank of Switzerland predicted that global recession was very close and the global economy would require more than two years in order to recover from such shocks (Bernanke “The Global Saving Glut and the U.S. Current Account Deficit”). A few days after this statement, the crisis was on its full swing. Necessary actions were taken to fix the crisis situation, such as huge among of capital was injected in the economy by the government, interest rates were cut down for the borrowers, but the matter went out of hands. The heat of this issue and a series of other training events are still prevailing and companies are trying to overcome from the economic catastrophe. In the backdrop of this scenario, this study would be evaluating the facets of the subprime crisis and its consequence on organizations in the global marketplace. Identifying the origin of the subprime crisis is significant as well as interesting investigation that would be presented through this study.
There are various causes which can be evaluated and discussed while investigating the subprime mortgage crisis, but in this study, the focus would be specifically on the housing bubble and banking segment. The problem that would be discussed and scrutinized in this study would be the contribution or role of the banks and financial institutions in the subprime mortgage crisis.
The hypothesis is the assumption that a researcher makes regarding the direction and result of the study because actually going through all the process of research. This gives the researcher an n idea about the way the research study would turn out to be. In this case, the role of banks would be specifically discussed in the case of the subprime crisis. Banks do have a significant contribution towards liquidity crunch and the creation of the housing bubble, which finally led to the subprime crisis. .