Core reason for the problem :
Increasing speculation
→ Announced 8.31 Step
with emphasis on holding taxaxtion and
transfer income taxation
Lee's government finds reason of the uprising price of realestate in the inconsistency of supply and demand.
This policy also insists that the restrictions on realestate must be relaxed.
It tries pump-priming by supporting construction ind
policies were aimed to stabilize the housing price and not to reduce it. Despite the measures, because of China’s fast growing economy and the high deposit level in banks, housing prices continued to surge.
In 2007, tighter financing policies were implemented. The central bank raised lending rates by six times during the year, directly increasing the burden of housing mortgage loans. The cen
Example of sub prime mortgage loan
House prices 2million won
1 million won my money and bank loans 1million to buy a house
If house prices rise 1million won
Maintain bank loans 1million won
Add of 1million money to 1 million won my money
Currently my money: my money : 2million won –bank loans : 1 million won = 1 million won
If house prices fall 1 million won
Maintain bank loa
II. What Are Credit Derivatives?
Derivatives are defined as the exchange or contract which has economic values deriving from the reference assets or index. According to their types, there are overall forward, future, option, and swap. Derivatives are the financial derivatives, which are enabled to trade in the market while consisting of separating the credit risk only to the holder of basic p
realestate, stock share, bank deposits, etc.
Since its return to China in 1997, politically, Hong Kong has been the special administrative region of People’s Republic of China, but economically, it has enjoyed independent economic system from China with the system of market-based capitalist economy. That’s why business men in Hong Kong are playing the role as network chains of Chinese econ