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Wharton Experts on The Great Recession, 10 Years Later - Part 1

Business Radio Special: The Great Recession: What's Changed in 10 years Part 1


On September 15, 2008, Lehman Brothers declared bankruptcy which sent the stock market tumbling. The problems that started in the US soon spread to Europe.  Several European nations, including Greece, Italy, Portugal and Spain, faced austerity to deal with their debt, and still face issues today.  Wharton Finance Professor,  JOAO GOMES, and ERIK JONES, Director of European and Eurasian Studies, Johns Hopkins University School of Advanced International Studies, join us to discuss how the European Union dealt with the recession and its lasting impact. 


Then, Iceland was the textbook case of the global banking crisis. Back then, the three biggest banks in Iceland had assets that were 14 times the national economic output of the country. At the height of the crisis Iceland's debt was close to 100% of GDP. Today that number is 24.1%. We look at how the country recovered and the risks it still faces with PHILIP NICHOLAS, Wharton Professor of Social Responsibility in Business and Professor of Legal Studies in Business, and THORVALDUR GYLFASON, a  University of Iceland Economics Professor. 


Next, after Lehman Brothers collapsed and the stock market plunged, Congress passed a $700 billion bailout bill to save the US financial system. Corporations deemed "too big to fail" got help.  President George W Bush and, after his inauguration in January. 2009, President Barack Obama worked with Congress on new regulations for financial institutions, including the Dodd-Frank Act. Wharton Legal Studies and Business Ethics professors PETER CONTI-BROWN and DAVID ZARING join us to discuss how the banks recovered from the recession and where things stand now with regulations. 


Finally, one of the most significant parts of the financial crisis in the US was the housing bubble. Banks were making home loans often without down payments to people who couldn't afford them. When the bubble burst, millions ended up in foreclosure and various metropolitan areas around the country, like Las Vegas, Modesto and Fort Meyers, found themselves in dire economic times. Rules were changed to make it a lot more difficult to qualify for a mortgage, with more stringent requirements on down payments. We look at the housing crisis and how things look today with SUSAN WACHTER, Wharton Professor of Real Estate and Finance, and BENJAMIN KEYS, Wharton School Real Estate professor and Faculty Research Fellow at the National Bureau of Economic Research.

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