Alan Greenspan ( former governor of the U.S. central bank) clearly states the (1) : "... it 's been over-securitization of sub-prime mortgages (2) to kick off the current crisis of solvency '(Banks, ed.) " Olivier Blanchard (Chief Economist International Monetary Fund) states (1) "... the crisis is not ... 'was triggered by the global imbalances."
The banking system - short-term strategic thinking in order to obtain a greater return on investment through the use of increased leverage (3) - has implemented a securitization business model that allowed him to ultimately achieve two results, in contrast to the concrete concept of the bank:
- transfer the credit risk (4) bank savers;
- anticipate future profits embedded in mortgage contracts (5) .
Banks have called this business model of "originate-to-distribute-model." (6)
The banking system, using off-balance sheet (7) , so has' created a shadow banking system out of control, in order to accelerate its economic growth, turnover and profits Company (8) at the expense of sound and prudent management, the interests of investors, the economic system and the community '.
Bankruptcy of this banking system - some hidden - originated by the mortgage crisis sub-prime, according to estimates made by the International Monetary Fund, between losses and asset write-downs of the budget will cost the banks' $ 4.1 trillion (9). A hole equal to the average annual net salary of about 200 million of Italians (10) . L to weigh colossal figure 'for many years on the balance sheets of households, businesses and the fate of the world economy in general.
The extreme gravity 'of the situation has forced the governments of the G20 to act quickly to rescue the global banking system to cover its huge losses, drawing on the resources of government debt, thus avoiding collapse and stabilize 'the international financial system as a whole (11) .
Based on authoritative economic estimates (12) , the financial crisis will procure 'losses in terms of gross domestic product (GDP), representing $ 4.7 trillion in the years 2008-2015. It also produced a loss of market capitalization in stock prices during the period from July 2007 to October 2008, amounting to $ 26.4 trillion!
These are the effects of the financial crisis of the sub-prime mortgages that will soothe. Makers, bureaucrats, modern jurists and economists will instead find a plausible answer to the fact that until yesterday the enormous profits of private banks were private, but now the loss of those same private individuals are socialized (13) .
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(1) Alan Greenspan, Il Sole 24 Ore, May 14, 2009, Dossier "Lessons for the future." Olivier Blanchard, Il Sole 24 Ore, June 21, 2009. Interventions Publishing by Fabio Galimberti.
(2) J. Kiff, P. Mills, IMF Working Paper, WP/07/188 [ http://www.imf.org/external/pubs/ft/wp/2007 / wp07188.pdf ]
(3) Senate, 6-Finance and Treasury, XVI Leg., Scouting Surveys, 33 ^ 21/10/2008 meeting, Financial Crisis, Hearing of the Bank of Italy [ http://www.senato.it/documenti/repository/commissioni/stenografici/16/comm06/6a-20081021-IC-0079.pdf ]
(4) M . Badendo, B. Bruno, Credit Risk Transfer Practices in U.S. Commercial Banks, SSRN [ http://ssrn.com/abstract=1343627 ]
(5) v. Technique discount cash flows (discounted cash flow ) [ http://en.wikipedia.org/wiki/Discounted_cash_flow ]
(6) The model and 'historically held in the U.S. for government initiative. In the thirties, federal agencies were set up whose task was to buy mortgages and loans from the banks financing these purchases by issuing bonds. The aim was to encourage home purchases by low-income families. In 1938 the agency was established Fannie Mae and subsequently in 1970 the agency Freddie Mac. Both agencies have returned after having been privatized recently under federal control because of the difficulty 'of the financial crisis triggered by subprime mortgages. At the end of 2007 the outstanding securities related to securitizations ($ 13 trillion) accounted for 42% of total bonds outstanding in the U.S. and 63% of base year emissions. In a country like the USA, with very low propensity to save of households, securitisations have been the first source of supply of money the banking system.
(7) v. SIV [ http://en.wikipedia.org/wiki/Structured_investment_vehicles ]
(8) Bill Gross, Founder of Pimco and IOC, CNN.Money [ http://money.cnn.com/2007/11/27/news/newsmakers/gross_banking.fortune/index.htm ]
(9) IMF, Global Financial Stability Report, April 2009, Executive Summary [ http://www.imf.org/external/pubs/ft/GFSR/index.htm ]
(10) OECD data: Net income $ 21,374, Taxinge Wages 2007/2008: 2008 Edition, OECD 2008
(11) G20 Summit in London, April 2, 2009, Final Report [ http://www.londonsummit.gov.uk/resources/ en / pdf / final-communique ]
(12) Olivier Blanchard, IMF Working Paper, WP/09/80 [ http://www.imf.org/external/pubs/ft/wp/2009/wp0980 . pdf]
(13) The EU governments have already 'approved $ 5.3 trillion in subsidies to support the banking system. A figure greater than the GDP of Germany and Italy combined. (See Meera Louis in Brussels, 12/06/2009, Bloomberg.com). [ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aI.TvvSBYXBM ]
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