From first three parts of the Frontline documentary- “Money, Power, and Wall Street.”
1. What are credit default swaps and how did they contribute to the Great Recession? 2. What are mortgage-backed securities (collateralized debt obligations) and how did they contribute to the Great Recession? 3. What caused the “freeze” in the financial markets? 4. What was the government’s initial response to the failing financial markets/firms? Discuss moral hazard and how the government’s decision on why certain firms were saved while others were not. 5. Discuss the concept of systemic risk? 6. What was the government’s later response to the failing financial markets/firms when it was determined that a collective/system-wide response was needed? 7. Explain the stress test and its purpose in resolving the banking crisis?
