The bursting of the US house bubble, and the subsequent collapse of the sub-prime mortgage market, triggered a series of events that led to the global Financial Crisis. With these unprecedented impacts on the economy, a swift approach was needed - this came in the form of QE.
Key learning objectives:
Identify the role of the sub-prime mortgage market
Explain the impact of banks via securitisation
Describe the approaches of the FR, ECB and the BOE