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Part 2 A Green Future, Further Analyses and Discussion

The 2008 Financial Crisis and how it was handled is a big part of your analysis in Stolen.

How did financialization lead to this crash?

Why do you think so few economists saw it coming? And what was the

problem with the government's response? So there are multiple different ways in which financialization

led to the particular crisis that we had. So you can analyze it on a surfaced level and look at the

proximate causes of the financial crisis, which was the securitization

of mortgage debt in the US, a lot of which was subprime, so relatively low quality and unlikely

to be repaid. The processes that were used to parcel up those loans into particular forms

of financial securities that could be traded on financial markets in a way that the assumption was that that

kind of eliminated risk so that they were able to create very high rated securities on the

back of quite low grade debt the banks were. So both that process, also the way in which those

securities were created and then distributed in the system meant that the sausage-making process of building

mortgage-back securities and collateralised debt obligations left some of the biggest banks

with a lot of those less valuable securities on their books. And also the fact that a lot of what

was on their books wasn't overtly visible because

of the structures that the banks had used to basically hide the fact that they had a lot more

risk on their balance sheets than it initially seemed through the creation of different

institutions that sat off balance sheet allegedly,

but were entirely funded by that bank and that bank was responsible for all its liabilities.

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