Through the market for mortgage-backed securities, bad practices in the consumer financial market put our entire system at risk.
As the housing market stalls, the financial system will begin to seize up, resulting in a stock market collapse and a deeper recession than in 2008.
The main reason for the country's economic resilience is that neither its financial system nor its housing market magnified the recession.
If not for the excess liquidity created, there would not have been sufficient fuel to distort the housing market and ultimately the financial system.
Default would then be inevitable, and with it damage to both market confidence and the domestic financial system.
Measures crafted to stabilize the financial system, rescue the housing market, prop up the auto sector and boost the economy were inherited imperatives.
The flood of additional dollars into the financial system pumped up the stock market and commodity prices, creating inflation, but its effect on the economy was apparently only temporary.
The Obama administration made much the same assessment of the still plunging economy, continued freeze up of the financial system, and need for continuing the unprecedented government intervention in the free market system.
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One objection to the market-based system is the financial barriers faced by low-wage immigrants.
Their collapse would be disastrous for the U.S. mortgage market and the country's financial system in general.
Hu said China will push for mutually beneficial economic cooperation with the U.S. to enhance market confidence and stabilize the international financial system.
Throughout this financial market turmoil, our focus has been to stabilize the system and support the lending that is vital to our economy.
Like other Myanmar companies, though, it has limited access to capital under Myanmar's antiquated financial system, which lacks a corporate-bond market or a major stock exchange.
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The Federal Reserve, lagging other central banks, pumped in extra money and then cut its discount rate to prevent a seizure of the financial system in the aftermath of the subprime mortgage market debacle.
This partially offsets the mark-to-market drain on regulatory capital and helps hold the financial system together.
Yet Drexel's collapse, which happened when the market was functioning normally, did not put the financial system or the economy at risk.
As the Fed extracts these assets from the financial system it may be effectively extracting liquidity from the market, which is would be contractionary.
Jeff Friedman of Critical Review and Wladmir Kraus have investigated how these new rules warped the financial system, making it dangerously exposed to the mortgage market.
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Moving forward, we as a nation must work together to strike the right balance between our need to promote the public trust and using taxpayer money prudently to strengthen the financial system, while also ensuring the trust of those market participants who we need to do their part to get credit flowing to working families and businesses -- large and small -- across this nation.
We went from banks to the open market, and in the process we went from a financial system that was largely, not entirely, devoted to what might be called relationships.
"The financial system keeps changing so quickly - in every country, in every market, " he says.
Others argue that the financial system itself hangs in the balance if big players in the derivatives market are left unrestrained.
The Nellis project was developed through a complex arrangement between the Air Force and financial partners where power providers covered system construction costs in return for a guaranteed market along with substantial federal tax subsidies and other incentives.
There are other countries that actually were running a surplus and had fairly responsible fiscal policies but had weaknesses similar to what happened here with respect to their housing market or the real estate markets, and that has weakened their financial system.
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She also said that Germany's "social market economy" could serve as a model for a future international financial system in which governments guarded both the "social and economic order" and proposed the creation of a U.N. economic council modeled on the Security Council.
And if the financial crisis taught us anything, it is that contagion is endemic to the global market system.
"The MFI will enhance investor and market confidence, benefit sound financial institutions, assist troubled institutions and protect our financial system, while minimizing taxpayer exposure, " he said.
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The bursting of the commodities and housing bubbles would not have threatened the very existence of our financial system had it not been for the perversity of mark-to-market accounting rules.
But a government bail-out would surely weaken confidence in America's financial system, especially as the government is also trying to stabilise the housing market and has an unspecified commitment to support the country's investment banks.
The hour is late, and the world's No. 2 economy is endangering its trading and financial partners by failing to correct for excesses in the timely way that a truly open market system does.
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