THE DEVELOPMENT AND IMPLICATIONS OF THE U.S. SUBPRIME CRISIS

The changing characteristics of the international financial systems starting from the second half of 2007 came as no surprise. Looking at the events in a synthetic manner, the main factors that led to the triggering and amplification of the crisis can be identified in the dramatic increase of new and more complex financial instruments, with increasing lack of transparency, in the conflicts of interest between market participants, in the imprudent lending practices in the financial services industry, in the deficiencies of rating agencies, together with the excessive confidence in the market's self regulation, the unrealistically low risk attributable to certain investments and, the inability to respond to early warning signals or to learn from the lessons of the previous crises.