This essay discusses the effects of the US subprime meldown on the Australian economy. Why do we have any transnational effects? To which extand exted to we have them in Australia? Can Australia counteract the subprime wave?
These and more topics have been discussed in the following paper from an Australian point of view.
I. Table of contents
II. Relevance of sub-prime mortgage market
a. Recent problems in the US-market
b. Reaction of the stock markets in Australia
III. Structure of the mortgage markets
a. Loan policy of Australian banks and real estate financial institutions in the last few years
b. Risks and effects of this policy
c. The way to minimize this risks
d. Problems of investment funds
IV. Market reaction of the risky practice of loans granting
V. Actual problems
VI. Conclusion
VII. References
Inhaltsverzeichnis (Table of Contents)
- Relevance of sub-prime mortgage market
- Recent problems in the US-market
- Reaction of the stock markets in Australia
- Structure of the mortgage markets
- Loan policy of Australian banks and real estate financial institutions in the last few years
- Risks and effects of this policy
- The way to minimize this risks
- Problems of investment funds
- Market reaction of the risky practice of loans granting
- Actual problems
- Conclusion
- References
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
The aim of this paper is to examine the relevance and structure of the sub-prime mortgage market in Australia, particularly in light of the recent sub-prime crisis in the United States. It investigates the current loan policies of Australian banks and real estate financial institutions, outlining potential risks and their implications for the Australian economy.
- The impact of the US sub-prime crisis on Australian markets
- The structure and practices of the Australian mortgage market
- The risks associated with current lending policies in Australia
- The potential consequences of increased loan defaults and negative equity
- The importance of responsible lending practices to mitigate financial risks
Zusammenfassung der Kapitel (Chapter Summaries)
The first chapter delves into the significance of the sub-prime mortgage market, examining the recent challenges faced in the US market and the subsequent reaction of Australian stock markets. Chapter two focuses on the structure of the Australian mortgage market, analyzing the loan policies of major banks and real estate institutions, including the risks and effects of these policies.
Schlüsselwörter (Keywords)
This paper explores key concepts including sub-prime mortgages, credit crisis, loan policy, Australian financial institutions, real estate market, risk management, and financial stability.
Frequently Asked Questions
How did the US sub-prime crisis affect Australia?
The crisis caused transnational effects, leading to volatility in the Australian stock markets and a re-evaluation of loan policies by domestic financial institutions.
What is the structure of the Australian mortgage market?
It involves various players, including major banks and real estate financial institutions, which have historically maintained specific lending policies that are now under scrutiny.
What are the risks of risky loan granting practices?
Risks include increased loan defaults, the emergence of negative equity (where debt exceeds property value), and potential instability for investment funds.
Can Australia counteract the sub-prime wave?
The paper discusses strategies to minimize risks, emphasizing the importance of responsible lending and regulatory oversight to maintain financial stability.
Why are investment funds particularly vulnerable?
Many funds are tied to mortgage-backed securities; when the underlying loans fail, the value of the funds can plummet, causing widespread market reactions.
- Quote paper
- Artur Penkala (Author), Christopher J. Kightley (Author), Moritz Meidert (Author), 2007, Sub-prime crisis in Australia? A deeper insight, Munich, GRIN Verlag, https://www.grin.com/document/88217
