閱讀與觀察札記

此篇英文作文是關於金融海嘯發生的原因。

爲了寫這篇作文，還找了一些英文資料，認識了相關財經字彙與知識，也好奇的看了一本中文財經書籍，順便讓我重新認識前聯準會主席葛林思潘過去的作為，真是１８０度的印象大翻轉。我對財經知識也不再非常排斥了，算是邊寫邊學吧！

初稿

A number of financial crises occurred in the 20^th century.  The major one occurred in 1929 to 1933.  It was known as credit crunch.  During the early 21^st century, the scale of global financial crisis is bigger.  The main cause of this situation is mainly from debt bubbles.  This could be traced far back to the housing policy implemented during Clinton presidency.  In addition, there are some other interrelated causes of global financial crisis, such as sub-prime mortgages, the housing bubble, and loose regulation of financial institutions. 

During Clinton presidency, he nominated Roberta Achtenberg, a politician, as Assistant Secretary for Fair Housing and Equal Opportunity.  She had been a civil rights attorney before becoming a political figure.  Clinton held a view that owning houses could decrease the criminal rate for the blacks, Mexican immigrants and workers.  An obstacle to the enforcement of the housing policy was Wall Street banks.  However, bankers would never loan money to the people not on fixed incomes.  As a result, Clinton Administration asked them to loosen the loaning conditions and made the conditions more creative.  Besides, Achtenberg set up offices nationwide for overseeing the banks.  If any bank refused to lend money to the mid- and low-incomers and the blacks, the bank discriminated.  Under the government’s power, the investment banks and various funds were set up.  It is right that each person has access to housing without discrimination.  Nevertheless, the risk management of banking system thus became insecurity from the government’s pressure.

As for sub-prime mortgages, Clinton Administration and Alan Greenspan also pushed or set an environment for them.  Clinton Administration had requested Fannie Mae, the nation's biggest underwriter of home mortgages, to expand mortgage loans among low and moderate income people.  Alan Greenspan, former chairman of the Federal Reserve, had also be responsibile for this crisis.  He favored free market.  The low interest rates boosted the housing market when he was in charge of the Federal Reserve.  Nevertheless, he didn’t regulate seriously the mortgages.  Other than that, he had initiated or endorsed some Acts, including Gramm-Leach-Bliley Act, allowing consolidation of commercial and investment banks, and passing the Commodity Futures Modernization Act of 2000, removing derivatives from federal oversight.  The operation of financial system seemed to be stabler and freer with more big banks.  However, the outcome was beyond our imagination once it was out of function.

In 2006, the real estate market hit the peak and then the home prices plunged sharply.  Besides, some derivatives related to sub-prime lending.  The default rates of sub-prime mortgages, especially the low-quality ones, led to the increasingly severity of the financial crisis.  The financial institutions had customers around the world.  Once they miscalculated the scale of the risk, the losses would be far great.  Unfortunately, the disaster happened.  Many mortgage banks, securities and insurance firms had faced the pressure of the closure or nationalization out of the housing bubble since 2007.  Fannie Mae and Freddie Mac Corporations were the first ones to be in troubles in August 2008.  Lehman Brothers, AIG and Merrill Lynch got big problems consequently and demanded US government to bail them out.  Not every financial firms could get government’s support.  Lehman Brothers was broken in September last year.  The financial systems, housing markets and mortgage in other nations were also influenced greatly.  Many banks in other countries were broken.  Credit crunch, inflation and recession came one by one.  All financial markets were in chaos.

We are not sure whether the catastrophe of global financial crisis is going to end.  Nonetheless, this crisis gives the nations, especially the developing and developed, an opportunity to scrutinize the past financial policies.  According to the G20 resolution in March 2009, all important financial institutions, markets and mechanism should be supervised properly.  How to resume a smooth and steady world economy will be the primary goal in the future.

修改後的定稿

Among the financial crises in the 20^th century, the most significant one, known as “The Great Depression,” occurred between 1929 and 1933.  During the early 21^st century, the scale of financial crisis is bigger than that in the last century.  Most of the nations are suffering from it.  The main cause of current financial crisis is debt bubbles.  This could be traced far back to the housing policy during the Clinton presidency.  In addition, there are some other interrelated causes of the global financial crisis, such as sub-prime mortgages, the housing bubble, and loose regulation of financial institutions. 

During the Clinton presidency, Clinton nominated Roberta Achtenberg, a politician, as Assistant Secretary for Fair Housing and Equal Opportunity.  She had been a civil rights attorney before becoming a political figure.  Clinton held the view that owning homes could decrease the crime rate.  An obstacle to the enforcement of the housing policy was the Wall Street banking system.  Bankers wouldn’t loan money to people on fixed incomes.  As a result, the Clinton Administration asked them to ease the loaning requirements and make the requirements more creative.  Besides, Achtenberg set up offices nationwide for overseeing the banks.  If any bank refused to lend money to the mid- and low-incomers, the bank was risked being accused of discrimination.  Under the government’s power, the investment banks, funds and derivatives were set up.  It was right for each person to have access to housing without discrimination.  Nevertheless, the risk management of banking system thus became unstable from the government’s pressure.

Not only housing policy but also sub-prime mortgages were the roots of this crisis.  As for sub-prime mortgages, Clinton Administration and Alan Greenspan also pushed or made policies for them.  Fannie Mae was the biggest underwriter of home mortgages in the U.S.  Clinton Administration had requested it to expand mortgage loans among low and moderate income people.  Alan Greenspan, former chairman of the Federal Reserve, is also responsible for this crisis.  He favored free market economics: governments should not interfere overly in economic activities.  Take the low interest rates for instance:  when he was in charge of the Federal Reserve, he lowered interest rates many times to boost the housing and stock markets.  The atmosphere of speculation was spread in those markets in America.  Nevertheless, he didn’t seriously regulate mortgage requirements.  Other than that, Greenspan initiated or endorsed some Acts- the Gramm-Leach-Bliley Act and Commodity Futures Modernization Act of 2000. The first one allowed the consolidation of commercial and investment banks; the second one removed derivatives from federal oversight.  The operation of financial system seemed to be stabler and freer with more big banks.  However, the outcome was far beyond our imagination as the financial system was out of function.  It was a disaster.  It appeared as a form of a national financial crisis at first, but it turned out to be the global one.

In 2006, the real estate market peaked and home prices plunged sharply.  Besides, some derivatives related to sub-prime mortgages.  The default rates of sub-prime mortgages, especially the low-quality ones, led to the increasingly severity of the financial crisis.  The financial institutions had customers around the world.  Once they miscalculated the scale of the risk, the losses turned out to be far greater. 

Unfortunately, the disaster happened.  Many mortgage banks, securities and insurance firms faced the pressure to close or nationalize out of the housing bubble since 2007.  Fannie Mae and Freddie Mac Corporations were the first ones in trouble in August 2008.  Lehman Brothers, AIG and Merrill Lynch all had big problems and demanded that the US government to bail them out.  Not every financial firm could get government support.  Lehman Brothers went into bankruptcy in September of last year.  The financial systems, housing markets and mortgage in other nations were also influenced greatly.  Many banks in other countries went into bankruptcy.  The credit crunch, inflation and recession came one by one.  All financial markets were in chaos.

We are not sure when the catastrophe of global financial crisis is going to end.  Nonetheless, this crisis gives nations, developing and developed, an opportunity to scrutinize their past financial policies.  According to the G20 resolution in March 2009, all important financial institutions, markets and mechanism should be supervised properly.  How to resume a smooth and steady world economy will be the primary goal in the future.