The consequences of subprime crisis for the Polish economy

Abstract

In march 2008 the situation on the mortgage market was called a crisis. Many companies collapsed, including New Century Financial Corporation – the biggest credit company in the United States. After few months this virus infected other countries including Poland. The purpose of this article is to show the background of the subprime mortgage crisis and the possible outcomes for the Polish economy. The first part is trying to find out what are the causes and course of this financial breakdown. That part is mainly focused on subprime loans and its significance to this crisis. After that paper contain information about the main channel of infestation, the securitization of the debt by the banks and selling the securities to the investors all over the world. The next chapter contains the data about the impact that crisis have on polish economy, including GDP growth rate and what would likely happen on housing market and stock exchange. Polish banking and credit system is sounder then American one and there is no risk of insolvency but still we are feeling the consequences of the financial crash. In the end author concludes that in the globalized world financial markets are linked and it is impossible to maintain unaffected by crisis that happened on the other side of the globe.