Greed and Lack of Ethics Fuel Financial Crisis

Greed and Lack of Ethics Fuel Financial Crisis

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Greed and Lack of Ethics Fuel Financial Crisis

The financial crisis of 2008 was the result of a combination of factors, including greed and lack of ethics among financial institutions and individuals. One of the primary causes of the crisis was the widespread practice of issuing and securitizing subprime mortgages. Banks and other financial institutions issued mortgages to borrowers with poor credit, and then packaged those mortgages into securities that were sold to investors. The problem was that many of these mortgages were given to borrowers who could not afford to repay them, and when housing prices began to decline, many of these borrowers defaulted on their loans.

The greed of the financial institutions is evident in the fact that they were more focused on the short-term profits to be made from issuing and securitizing these mortgages, rather than on the long-term sustainability of the loans. They knew that the borrowers were at high risk of default, but they issued the loans anyway in order to make a quick profit. Additionally, many of the financial institutions did not properly underwrite the loans, meaning they did not properly evaluate the risk of default.

The lack of ethics among financial institutions is also evident in the way they marketed and sold the securities to investors. Many of the securities were marketed as being low-risk, when in fact they were highly risky. This was done in order to get investors to buy the securities, and to keep the prices of the securities artificially high. Additionally, many of the financial institutions did not properly disclose the risks associated with the securities, which made it difficult for investors to make informed decisions about whether to invest in them.

Another factor that contributed to the financial crisis was the widespread use of financial derivatives, such as credit default swaps. These derivatives are financial contracts that are used to transfer risk from one party to another. In the case of the financial crisis, many of the financial institutions bought credit default swaps as a way to protect themselves against the risk of default on the subprime mortgages they had issued. However, the problem was that many of the financial institutions did not have enough money to cover the potential losses if the mortgages did default, which is what ultimately led to the collapse of many of the institutions.

Furthermore, many of the investment banks and rating agencies were not as independent as they should have been, leading to a lack of transparency and objectivity in their ratings and assessments. Rating agencies were being paid by the issuer of securities, which led to a conflict of interest and lack of critical evaluation of the securities themselves.

In conclusion, the financial crisis of 2008 was the result of a combination of factors, including greed and lack of ethics among financial institutions and individuals. The widespread practice of issuing and securitizing subprime mortgages, the lack of proper underwriting and disclosure, and the widespread use of financial derivatives all contributed to the crisis. The greed of the financial institutions is evident in the fact that they were more focused on the short-term profits to be made from issuing and securitizing these mortgages, rather than on the long-term sustainability of the loans. Additionally, the lack of ethics and independence among some of the financial institutions and rating agencies further exacerbated the crisis.

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Excellent Quality 95-100%	Introduction 45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.		Literature Support 91-84  points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.			Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score 50-85%	40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.		83-76  points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.			52-49  points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality 0-45%	37-1 points The background and/or significance are missing. No search history information is provided.		75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.			48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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