The spread, too, was uneven…...” Current Challenges and the Role of Exogenous Factors 3. Against this historical detour, let me come to the challenges faced by the banks today, many of which are a result of how various exogenous factors have played out over the years. Everyone concerned should realise that banks are in the business of taking bonafide risks.
In the US sub-prime crisis, underestimation of the risks associated with sub-prime loans-backed securitization products or credit derivatives makes the sub-prime crisis unnoticeable, abrupt and highly contagious. Fifth, it is necessary to improve or relax financial control in order to fully display the fundamental role of the financial market in resources allocation and to provide a favorable environment for financial innovation.