Role Of The Treasury And The Fed In The Credit Crisis During 2007 - 2010

NameUniversityCourseTutorDateIntroductionTreasury and Fed play a great role in the US economy they argon even much large during financial crisis and other periods of economic difficulties . Some of the roles played by Fed include open market operations , adjusting grade of interest , purchasing of securities and adjusting the requirement ratio of reserves . These are very essential roles in the American economy as Fed and treasury are able to apply them in regulating the given time . These roles thus make it viable for Fed and treasury to control inflation in the economy , while at the same time controlling the take aim of activity in the financial and money markets . These roles are accordingly very important fostering faster economic outgrowth and stability (Acharya , pp 11Causes of the financial crisisSeveral factors are in straightway or directly responsible for causing the current financial crisis which started in 2007 .

i of the major causes of the financial crisis was the bursting of the housing bubble in the united States mortgage industry . Prior to the commencement of the current doctrine crisis that is , the period 1997 - 2006 , prices of houses in the United States increased by more than 124 . Homeowners were therefore in a position to access more credit facilities from the banking industry . However , upon the bursting of the housing bubble in 2006 , the prices of houses dropped sharply and it became very difficult and even impossible for the homeowners to...If you motivation to get a full essay, order it on our website: Orderessay

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