Abstract
In 1970, three major events have stimulated the financial market and have lead to a necessary increase of its use and its scope. These events are:
- the adoption of a floating change system in March 1973 ;
- the increase of the American deficit ;
- the American choice of the loanback pension (The ERISA (Employment Retirement Income Security Act).
The floating rates required the creation of an exchange market rate to trade currencies. At the meantime, the American deficit increased dramatically. This growing deficit could be eventually financed by institutional and foreign investors with the creation of a fixed income market where US bonds (T-Bill, T-Note and T-Bond) were issued by the federal central bank.
The Credit Crunch began in August 2007, when interbank lending markets in the US, UK and Europe began to seize up. The topic question is about the factors which drove to the credit crunch. It means to find the root and elements linked to this root. Elements must be logically linked to the credit crunch. It's necessary to find the way which can explain the credit crunch. Separated elements without link with others elements will not be taken in consideration.
In this essay, I limit the scope of discussion with financial factors which drove to the credit crunch. Indeed the roots of this event can open onto lots of factors (socials factors, politics factors etc…)
