Containing Financial Crisis (CRS Report for Congress)
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| Release Date |
Revised Nov. 24, 2008 |
| Report Number |
RL34412 |
| Report Type |
Report |
| Authors |
Mark Jickling, Government and Finance Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
In mid-2007, mounting losses in subprime mortgage markets triggereddisturbances throughout the international financial system. The scale of the turmoilhas been surprising, given the small size of the U.S. subprime market in relation toglobal financial markets. Not only is subprime a comparatively small market, itsproblems were known well in advance: when the rapid rise in housing prices stoppedin 2006, it was inevitable that many subprime borrowers would have difficultymaking payments, particularly those whose adjustable mortgage rates were scheduledto reset in 2007 and 2008. A Swiss bank CEO called subprime loan losses "probablythe longest anticipated crisis we have ever seen."
