KONUT BALONLARININ OLUŞUMUNDA FED’İN ROLÜ VE KÜRESEL KRİZDEN ÇIKARTILACAK BAZI DERSLER

The basic reasons of financial crises that first appeared in US were the careless mortgage credits and thereby the surge in the home prices. Especially, the US banks started giving mortgage credits to the low income level groups bearing high risks. Eventually this highly risky group could not pay the loans back to the banks. It can be said that the low interest rate fallowed by Fed during 2001-2005 was the main reason for the last financial crisis. Since the Fed maintained this low interest rate, all the banking system ended up with the excess reserves. This led the banking system to take higher risk and began to loan to the mortgage and sub-prime mortgage markets yielding high returns. Due to the securitization of mortgages, home prices went up significantly between 2003-2006. This created a bubble in the real estate market. The significant drop in home prices in 2006 and toxic mortgages burst this bubble in 2008. The purpose of this study, thus, is to analyze the effects of Fed’s expansionary monetary policy practiced before the financial crisis on the securitization and the real estate bubble in US.