The Subprime Mortgage Crisis Devastated From The Global...

Writing Assignment #2 Financial Market Yuxue Zhang The 2008 subprime mortgage crisis devastated from the global financial market. People believed that the â€Å"Big Three† credit rating agencies played a significant role at various stages in the crisis. The Reuters, in an article published in 2011, even claimed that credit rating agencies triggered the financial crisis. The Reuters believed that Moody’s Corp and Standard and Poor triggered the worst financial crisis in decades by downgrading the rating on complex mortgages securities triggered the worst financial crisis in decades. However, the problems of rating agencies have existed for quite a long time and accelerated the crash down in some extend. In my opinion, despite the significance of the â€Å"trigger†, the credit rating agencies served as the â€Å"catalyst† for the crisis by inducing the investor to enter under-served markets. First, there is too much trust and investors are over confident about the rating from the â€Å"Big Three†. R ating agencies are remarkably profitable businesses, and they exhibit exceptional influential in the global financial market. As the global capital market grows rapidly, investors seek trustworthy and standardized tool to help their investment decisions. Therefore, when Moody first introduced the rating system in his â€Å"Moody’s Analyses Railroad Investment†, the system gained recognition quickly and became popular to investors. When problems of credit risk quickly escalated as financial market grew,Show MoreRelatedThe Subprime Mortgage Crisis Devastated The Global Financial Market1031 Words   |  5 PagesWriting Assignment #2 Financial Market Yuxue Zhang The 2008 subprime mortgage crisis devastated the global financial market. People believed that the â€Å"Big Three† credit rating agencies played a significant role at various stages in the crisis. The Reuters, in an article published in 2011, even claimed that credit rating agencies triggered financial crisis. The Reuters believed that Moody’s Corp and Standard and Poor’s action of downgrading the rating on complex mortgages securities triggered theRead MoreFinancial Crisis After The Great Depression1229 Words   |  5 Pages2008 Financial Crisis Not since the great depression was there such a devastating economic crisis as the 2008 financial crisis. A crisis rooted from the burst of the housing bubble in the U.S. thus leading to the government being brought down, ruined economies, crumbled financial corporations and impoverish lives of numerous individuals. As reported in McClean and Nocera’s All the Devils Are Here: The Hidden History of the Financial Crisis, â€Å"the seeds of [the] financial disaster were sown more thanRead MoreA Brief Note On The Economic Impact On The Economy1533 Words   |  7 Pagesstill rebounding from the 2007-2010 subprime mortgage crises. 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