These institutions, as well as certain regulated banks, had also assumed significant debt burdens while providing the loans described above and did not have a financial cushion sufficient to absorb large loan defaults or MBS losses. These losses impacted the ability of financial institutions to lend, slowing economic activity. Concerns regarding the stability of key financial institutions drove central banks to provide funds to encourage lending and restore faith in the commercial paper markets, which are integral to funding business operations. Governments also bailed out key financial institutions and implemented economic stimulus programs, assuming significant additional financial commitments.
2007 ఆర్థిక సంక్షోభంలో రుణాలు ఇచ్చే ఆర్థిక సంస్థల సామర్థ్యాన్ని ఏది ప్రభావితం చేసింది?
large loan defaults or MBS losses