On Thursday 22nd November, I attended the lecture at Eton by Professor Andrew Baum as part of the ECEES lecture series. The lecture was entitled how Property Investment caused the financial crisis. Being new to economics, I didn't really have a detailed idea of how the financial crisis in the UK was caused and expected the lecture to go straight over my head. But the lecture was both interesting and accessible, and Professor Baum explained how leverage meant that 90% of property investment was paid for in loans from the bank, and when the price of houses dropped and they were sold for less than expected, companies and individual investors owed money to the banks that they could not pay. This was a regular occurrence and assisted the banking crisis that was integral to the financial crisis. This ECEES arranged lecture was very valuable and I would recommend future lectures to anyone with an interest in economics.
Below is Professor Baum's new book, which covers the points of his lecture in more detail. It can be found in the Epsom College library.
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