Subprime mortgages and the MBSs in generating and transmitting the global financial crisis

The paper addresses numerous factors which generated and transmitted the 2007-2009 financial crisis, with the special attention paid to phenomena observed in the subprime mortgages and MBSs markets. The aim of the paper is to provide a critical survey which systematically examine the literature of those factors. The paper discusses the roots of the subprime crisis and characterizes briefly the most important milestones in the process of the crisis propagation. Then it presents analysis of the impact of the subprime and MBSs markets on the outburst of the global financial crisis provided by staff of selective international financial institutions and central banks. The special attention is paid to factors of crisis propagation after the subprime mortgage and MBSs markets collapse. Strict interdependencies among tall discussed factors are emphasized.