Post by account_disabled on May 1, 2024 21:15:16 GMT -7
Borrowers were confronted with a growing myriad of mortgage options with provisions that made them difficult to compare even for economic man let alone for average consumers who may also have had too little self control in their desire for a home and a mortgage. The resulting mortgages were then packaged in ways that John Bogle in his new book Enough characterizes as creating a modern version of alchemy turning packages of poorly rated mortgages into triple A rated collateral debt obligations complete with supposed insurance against risk.
The problem was that even financial experts couldn t understand their value or their risk further impeding the intelligent choice so important to effectively functioning markets. Worse yet South Africa WhatsApp Number List the financial products were created by financial engineers motivated to make them complex and therefore harder to understand. What is to be done According to Thaler and Sunstein it starts with recognizing that while greed and corruption helped create the crisis ... simple human frailty played a vital role. They suggest providing incentives to make financial products easier not more difficult to understand.
This would involve among other things more disclosure about the real costs and risks of a loan. Further they suggest in a recent Financial Times op ed that government and the market should try to deal with temptation our limited self control by for example requiring that families accumulate some savings or be willing to shorten the term of the loan in order to qualify for refinancing. These recommendations fall at the intersection of financial and social engineering. They raise the question of whether housing and credit can be nudged back to health in this manner or whether there is some better approach. What do you think To read more John C.
The problem was that even financial experts couldn t understand their value or their risk further impeding the intelligent choice so important to effectively functioning markets. Worse yet South Africa WhatsApp Number List the financial products were created by financial engineers motivated to make them complex and therefore harder to understand. What is to be done According to Thaler and Sunstein it starts with recognizing that while greed and corruption helped create the crisis ... simple human frailty played a vital role. They suggest providing incentives to make financial products easier not more difficult to understand.
This would involve among other things more disclosure about the real costs and risks of a loan. Further they suggest in a recent Financial Times op ed that government and the market should try to deal with temptation our limited self control by for example requiring that families accumulate some savings or be willing to shorten the term of the loan in order to qualify for refinancing. These recommendations fall at the intersection of financial and social engineering. They raise the question of whether housing and credit can be nudged back to health in this manner or whether there is some better approach. What do you think To read more John C.