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  • March 2008 (Revised July 2009)
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U.S. Subprime Mortgage Crisis: Policy Reactions (A)

By: Laura Alfaro and Renee Kim
  • Format:Print
  • | Pages:20
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Abstract

By March 2008, the U.S. Government and the U.S. Federal Reserve Board had taken various policy measures over the last few months to tackle the subprime mortgage crisis that threatened to drag the economy into a recession. The Bush administration approved a fiscal stimulus package exceeding $150 billion. Interest rates had been repeatedly cut at the fastest pace in decades, to 2.25% as of March 2008. The Fed, in an unprecedented move, helped JPMorgan Chase to take over Bear Stearns, which was on the brink of collapse. Yet as the global economy faced slower growth stemming from the U.S. mortgage crisis, policy makers were caught in an intense debate over what the 'right' solution would be, and the implication of these policies on global imbalances.

Keywords

Financial Crisis; Inflation and Deflation; Central Banking; Mortgages; Policy; Business and Government Relations; United States

Citation

Alfaro, Laura, and Renee Kim. "U.S. Subprime Mortgage Crisis: Policy Reactions (A)." Harvard Business School Case 708-036, March 2008. (Revised July 2009.)
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About The Author

Laura Alfaro

General Management
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Related Work

    • April 2009 (Revised June 2010)
    • Faculty Research

    U.S. Subprime Mortgage Crisis: Policy Reactions (B)

    By: Laura Alfaro and Renee Kim
Related Work
  • U.S. Subprime Mortgage Crisis: Policy Reactions (B) By: Laura Alfaro and Renee Kim
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