15 Facts About Subprime crisis

Europe continued to struggle with its own economic Subprime crisis, with elevated unemployment and severe banking impairments estimated at €940 billion between 2008 and 2012.

Defaults and losses on other loan types increased significantly as the Subprime crisis expanded from the housing market to other parts of the economy.

Risks to the broader economy created by the housing market downturn and subsequent financial market Subprime crisis were primary factors in several decisions by central banks around the world to cut interest rates and governments to implement economic stimulus packages.

Subprime crisis lending was a major contributor to this increase in home ownership rates and in the overall demand for housing, which drove prices higher.

Subprime crisis concluded that the extent of equity in the home was the key factor in foreclosure, rather than the type of loan, credit worthiness of the borrower, or ability to pay.

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Subprime crisis loans have a higher risk of default than loans to prime borrowers.

Further, major investment banks which collapsed during the Subprime crisis were not subject to the regulations applied to depository banks.

Particularly relevant to the Subprime crisis are credit default swaps, a derivative in which Party A pays Party B what is essentially an insurance premium, in exchange for payment should Party C default on its obligations.

Former Fed Chair Alan Greenspan, who many economists blamed for the financial Subprime crisis, testified in October 2008 that he had trusted free markets to self-correct and had not anticipated the risk of reduced lending standards.

Some analysts believe the subprime mortgage crisis was due, in part, to a 2004 decision of the SEC that affected 5 large investment banks.

Subprime crisis implored Congress to take actions to avert a crisis.

The Subprime crisis began to affect the financial sector in February 2007, when HSBC, one of the world's largest banks, said its charge for bad debts would be $10.

Subprime crisis's testimony included five elements he stated as critical to effective reform:.

Francis Fukuyama has argued that the Subprime crisis represents the end of Reaganism in the financial sector, which was characterized by lighter regulation, pared-back government, and lower taxes.

Current credit Subprime crisis will come to an end when the overhang of inventories of newly built homes is largely liquidated, and home price deflation comes to an end.