Current Financial Crisis
Origins and Government Response
Financial markets continue to experience significant disturbance and the banking sector remains fragile. Efforts to restore confidence have been met with mixed success. This report provides answers to some frequently asked questions concerning the financial disruptions of September 2008. Current Concerns What, if anything, is wrong with the financial system?Banks and other financial institutions have been reluctant to lend or otherwise engage with other institutions for fear of exposure to the bad assets of troubled counterparties. That is, a relatively healthy bank is afraid to sign a contract with another institution because of the fear that the other institution will…
