PNC Financial Services Group

  www.pnc.com
  www.pnc.com

Interview Question

Investment Banking Summer Analyst Interview(Student Candidate) Pittsburgh, PA

Explain your understanding of the 2007-08 financial crisis

  . What were the key factors at play and what do you think could have been done to avoid it?
Answer

Interview Answer

1 Answer

0

I talked a bit about how mortgage defaults and ambiguities in the structuring of synthetic CDOs caused concern about the value of collateral used for repo transactions which led to higher haircuts and created a liquidity death spiral... I think he liked that I used the phrase liquidity death spiral. For the second part I kind of copped out and said something about hindsight bias and if the smartest people in the world didn't foresee a systemic meltdown of the financial industry there probably was no way to avoid it.

Interview Candidate on Oct 7, 2013

Add Answers or Comments

To comment on this, Sign In or Sign Up.