Finanz- und Wirtschaftskrise 2007-2010
Makroökonomie
Der Text auf dieser Seite ist ein Auszug aus einem englischsprachigen Lehrbuch der Makroökonomik, das häufig in der Studieneingangsphase eingesetzt wird. Obwohl es auch Auflagen in deutscher Sprache gibt, ist es empfehlenswert, sich sehr früh im Studium an die englische Literatur zu gewöhnen.
Die Seiten 419-420 aus Giavazzi & Blanchard: Macroeconomics, A European perspective, Financial Times Press, 2010 sind eine Einführung in das Kapitel über die Finanz- und Wirtschaftskrise 2007-2010.
Bitte lesen Sie den Text und beantworten Sie die folgenden Fragen.
HOUSEHOLDS ‚UNDER WATER‘
The previous section left us with two questions: why did the value of houses shoot up after 2000 and why were the effects of the fall in house price so dramatic? Let us start from the increase in house prices. It is now obvious, (…) (but, as we said, it had been obvious to Robert Shiller for some years) that house prices were riding a bubble.’Housing prices cannot fall!‘ was a common statement in the years before the crash. As the title of Shiller’s book suggests, such exuberance is often irrational.
The increase in house prices was also the effect of a long period of extremely low interest rates which made borrowing to buy a house very attractive – especially if you believed the bubble would continue! The Fed kept interest rates low because inflation was low. House prices were rising fast, but house prices do not enter directly into the index used to compute inflation. What enters is the cost of renting a house, and this did not increase as fast as house prices and, in any case, not fast enough to move the CPI significantly.
So, house prices kept rising due both to rational exuberance and to very low interest rates. If house prices had been included in the index used to compute inflation, they would have made it rise and the Fed, in the face of rising inflation, would maybe have increased interest rates. The housing bubble would not have grown so much.
Borrowing to buy a house was also encouraged by a change in the rules banks followed to approve a mortgage, which became much less strict. The result was that even families who had a relatively high probability of not being able to pay the mortgage rates, the so-called ’sub-prime‘ clients, were accorded a loan. Why did banks take on these risks? The point is that they did not, or at least much less than in the past. In the old days, when a bank made a mortgage it kept it on its books till the day it was fully repaid. It thus had a strong incentive to keep an eye on the client and make sure he or she would repay.
Today, instead, a bank can pull a large number of mortgages together and sell the financial instrument which contains them to other investors. When an investor, sometimes another bank, buys one of these securities – which contains thousands of mortgages and is called a ‚mortgage-backed security‘ – it cannot check the quality of each individual loan. The quality of the security is certified by a rating agency. But rating agencies too cannot check each individual loan. The result is that quality control became weakened and banks became much less careful when they were making a loan. As we explain in the following Focus box (Securitisation is a great invention – provided it is done right‘), the problem was not securitisation per se, but the failure to regulate it appropriately.
If banks are not careful enough when they make a mortgage, it is no surprise that the moment house prices start falling some households go ‚under water‘, meaning that how much they borrowed from the bank exceeds the market value of their house. When this happens households (especially if they think house prices will never bounce back to previous levels) have an incentive to ‚walk away‘ from their home. The mortgage then goes into default and the house is ‚foreclosed‘ which means that its property is transferred to the bank. Because the value of the house is smaller than the value of the loan which was originally granted, the bank makes a loss.
Giavazzi & Blanchard: Macroeconomics, A European perspective, Financial Times Press, 2010, S. 419-420.
– Fed (Federal Reserve System): Notenbanksystem der USA
– CPI: VPI (Verbraucherpreisindex)
– irrational exuberance: irrationaler Überschwang
– mortgage: Hypothek
– loan: Kredit
– default: Zahlungsausfall
HOUSEHOLDS ‚UNDER WATER‘
The previous section left us with two questions: why did the value of houses shoot up after 2000 and why were the effects of the fall in house price so dramatic? Let us start from the increase in house prices. It is now obvious, (…) (but, as we said, it had been obvious to Robert Shiller for some years) that house prices were riding a bubble.’Housing prices cannot fall!‘ was a common statement in the years before the crash. As the title of Shiller’s book suggests, such exuberance is often irrational.
The increase in house prices was also the effect of a long period of extremely low interest rates which made borrowing to buy a house very attractive – especially if you believed the bubble would continue! The Fed kept interest rates low because inflation was low. House prices were rising fast, but house prices do not enter directly into the index used to compute inflation. What enters is the cost of renting a house, and this did not increase as fast as house prices and, in any case, not fast enough to move the CPI significantly.
So, house prices kept rising due both to rational exuberance and to very low interest rates. If house prices had been included in the index used to compute inflation, they would have made it rise and the Fed, in the face of rising inflation, would maybe have increased interest rates. The housing bubble would not have grown so much.
Borrowing to buy a house was also encouraged by a change in the rules banks followed to approve a mortgage, which became much less strict. The result was that even families who had a relatively high probability of not being able to pay the mortgage rates, the so-called ’sub-prime‘ clients, were accorded a loan. Why did banks take on these risks? The point is that they did not, or at least much less than in the past. In the old days, when a bank made a mortgage it kept it on its books till the day it was fully repaid. It thus had a strong incentive to keep an eye on the client and make sure he or she would repay.
Today, instead, a bank can pull a large number of mortgages together and sell the financial instrument which contains them to other investors. When an investor, sometimes another bank, buys one of these securities – which contains thousands of mortgages and is called a ‚mortgage-backed security‘ – it cannot check the quality of each individual loan. The quality of the security is certified by a rating agency. But rating agencies too cannot check each individual loan. The result is that quality control became weakened and banks became much less careful when they were making a loan. As we explain in the following Focus box (Securitisation is a great invention – provided it is done right‘), the problem was not securitisation per se, but the failure to regulate it appropriately.
If banks are not careful enough when they make a mortgage, it is no surprise that the moment house prices start falling some households go ‚under water‘, meaning that how much they borrowed from the bank exceeds the market value of their house. When this happens households (especially if they think house prices will never bounce back to previous levels) have an incentive to ‚walk away‘ from their home. The mortgage then goes into default and the house is ‚foreclosed‘ which means that its property is transferred to the bank. Because the value of the house is smaller than the value of the loan which was originally granted, the bank makes a loss.
Giavazzi & Blanchard: Macroeconomics, A European perspective, Financial Times Press, 2010, S. 419-420.
– Fed (Federal Reserve System): Notenbanksystem der USA
– CPI: VPI (Verbraucherpreisindex)
– irrational exuberance: irrationaler Überschwang
– mortgage: Hypothek
– loan: Kredit
– default: Zahlungsausfall