Financial Markets and Institutions

Your team is an independent panel hired by the Chairman of the Finance Committee of the House and Senate to investigate the Subprime Mortgage
Crisis, its aftermath, and the 2020 stock market crash. In 10 weeks, you will report your findings to the Committee.
The written report to the Committee is to include:
Part I (50%)

1. Summarize the subprime mortgage crisis and its aftermath in a chronological format, highlighting only significant events that occurred. Be sure to
   include the starting point, as you see it.
2. Outline the role that each party played in the subprime mortgage crisis. Identify the names of the companies that played a major role and briefly
   provide an update of their present status:
   a. Mortgage companies/ brokers
   b. Subprime borrowers
   c. “Money center” banks
   d. Investment bankers
   e. Mortgage credit insurers (Freddie Mac, Fannie Mae, Ginnie Mae)
   f. Credit rating agencies (the big 3)
   g. Investors (Pension funds, hedge funds, global investors)
3. Identify the winners and losers from this financial event. Clearly state your reasons

Sample Solution