Additional figures required settling on effects of sub-prime
predicament
19/09/2007
An analysis brought forward by Alliance Trust has just shown
the credit status for sub prime products. Witnessing figures
revealed by the institutions, it has indicated that it will be
impossible to decide precisely how severe it will affect the
market.
Head of Alliance Trust Research Centre, Shona Dobbie commented, “Before
this summer’s credit crisis, it seemed to be the economy
that was driving markets forward, and now it is the markets,
and how well they can weather this crisis, that appear to hold
the key to the future direction of the economy.
We have uncovered
a lot of astonishing facts and figures in our research into the
causes of the credit crisis, but what is most surprising is how
little we can unravel about where these enormous liabilities
have ended up. It is now up to institutions to untangle this
web because trust among them can only be rebuilt when we get
more clarity.”
Lending products such as ‘sub-prime’ to borrowers
with inconsistent credit background has conventionally accounted
for less than a tenth of the US mortgage market, through 2006,
sub-prime set for a fifth of new mortgages in the US.