DRIVING FACTORS OF THE SUBPRIME CRISIS AND SOME REFORM PROPOSALS

Billions in losses at financial institutions through-out the world, the sudden and extraordinary liquidity crisis on the interbank markets, the severe criticism targeted at the credit rating agencies and the new accounting rules – as well as the risk of a credit crunch affecting the real economy – all raise questions about the true causes of the financial crisis. The crisis started in the US subprime market and then spread with remarkable speed to global finan-cial markets. Immediately, culprits were identified. For example, the rating agencies were blamed for having underestimated the underlying risks of struc-tured financial products, and the regulatory and supervisory authorities were accused of not having done their homework thoroughly. A large part of the blame was put on the lenders in the US housing mar