Engineering the Financial Crisis: Systemic Risk and the Failure of Regulation

List of Figures and Tables

FIGURES AND TABLES Figures 1.1 Fed funds rate, mortgage interest rates, house prices 9 1.2 Business lending, investment, unemployment 12 1.3 Decline in bank lending to businesses 14 1.4 Growth of subprime bond bubble 48 1.5 Bubble bursts: house prices and delinquency 49 2.1 Rise of private-label MBS 69 2.2 Rise of asset-backed securities 71 2.3 Rise (and fall) of asset-backed commercial paper 72 2.4 Steady bank leverage before crisis 80 2.5 Largest banks shift into low-risk-weighted assets 82 3.1 Falling ``price'' of mortgage bonds 96 3.2 Accounting and capital-adequacy regulations 99 II.1 Rise and fall of U.S. asset-backed commercial paper 170 Tables 1.1 Distribution of mortgage bonds 13 1.2 Securities exposures of banks 34 1.3 Bankers' preference for safety 42 2.1 Risk weights under Basel regimes 74 2.2 U.S. bankers' search for capital relief 77 2.3 Overconcentration of private-label MBS 79 This page intentionally left blank ...