Subprime Crisis: Impacts and Implications
Global CEO, Vol. 9, No. 4, pp. 44-49, 2009
7 Pages Posted: 20 Nov 2009 Last revised: 11 Nov 2011
Date Written: November 11, 2011
Subprime mortgage loans are made to home loan borrowers who are having higher credit risks compared to prime mortgages because of irregular payment in the past, higher amount of debt compared to income level or any other such factors. Major causes of subprime crisis include the inability of homeowners to make their mortgage repayments, poor judgment by borrowers as well as lenders, excessive speculation in property price, high level of personal and corporate debt, and lack of proper regulation and innovation of structured financial products. The subprime crisis is likely to have longlasting economic impact on the world market.
Keywords: Sub Prime Crisis, Securitization
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