Sania Mirza ( PDF )

CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403

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What Causes Subprime Mortgage and Its Effect Toward Caribbean?

1.0 Introduction

The United States (US) economy has experienced its worst financial crisis since the

Great Depression. The financial crisis started in the home mortgage market,

especially the so called subprime mortgages, and is now spreading beyond

subprime to prime mortgages, commercial real estate, corporate junk bonds, and

other forms of debt. Total losses of US banks could reach as high as half of the total

bank capital, which would lead to a sharp reduction in bank lending, which in turn

could cause a severe recession in the US economy. The financial crisis distressing

the US economy would have already embarked the Caribbean into an economic

blackout. It is uncertain that this will happen but the external undulations of the

financial crisis in the US will cause an economic depression in the Caribbean(Smith,

2008).

The objective of this paper is to study and determine several key factors, which

are:

1. To understand what is subprime mortgage.

2. To understand how the subprime mortgage occurred in United States

3. To understand and identify what is the causes of subprime mortgage

4. To understand and identify what is the effect of subprime mortgage toward

Caribbean

5. To determine how to solution the subprime mortgage

2.0 Brief History in Subprime Mortgage Crisis

The subprime mortgage crisis of 2007 originated from the US subprime mortgage

market developed into a global financial crisis in 2008. Basically, banks lent too

much money to people who were unable to repay their debt. However due to the

close collaboration of world banks and Hedge Funds who make subprime mortgage

backed securities, the crisis leads to worldwide liquidity crisis.

This starts whenmortgage lenders sanction loans to the borrowers who are not

qualify for mortgages at market rates. These mortgages have easy initial payments

but it includes adjustable rates of interest if the market changed. During the time

when housing prices were increasing, several borrowers took on difficult mortgages,

thinking that as the value of their homes increased and they will be capable of

refinancethe properties (Smith, 2008)

on the home loans payment

increased rapidly.

Furthermore the borrower

bubble came to an end. The property value also diminished. Consequently, the

lenders were unable to regain the mo

properties.

Graph 1: Housing Activity Drops Off

Sources: National Association of Realtors; Census Bureau; authors’ calculations

CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING

mortgage lenders sanction loans to the borrowers who are not



s were increasing, several borrowers took on difficult mortgages,


Smith, 2008). Unfortunately, the borrowers start to default

on the home loans payment because it was expensive when the interest rate

Furthermore the borrower unable to refinance the properties as the housing


lenders were unable to regain the money that they had invested previously on the

Graph 1: Housing Activity Drops Off



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mortgage lenders sanction loans to the borrowers who are not



s were increasing, several borrowers took on difficult mortgages,


the borrowers start to default

because it was expensive when the interest rate

unable to refinance the properties as the housing


ney that they had invested previously on the



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Graph 1 describes that after booming the first half of this decade, US housing

activity has economized suddenly. DiMartino & Duca (2007) stated that the single-

family buildings authorities to have plunged 52 percent and existing-home sales

have dropped 30 percent since their September 2005 summits. An increase in

mortgage interest rates that started in the summer of 2005contributed to the housing

market's early weakness. By late 2006, though, certain signs pointed to improved

stability. However, they proved short-lived as loan-quality problems generated a

tightening of credit standards on mortgages, mainly for newer and riskier products.

The lenders reduce lending loan and the housing activity began to falteronce more

in spring 2007, accompanied by additional increases in delinquencies and

foreclosures. By late-summer financial-market disorder stimulated further

strengthening of mortgage credit standards.

3.0 What is subprime mortgage?

Subprime mortgage is a mortgage initiate of an asset to a creditor as security for a

loan to purchase the property or assets.The subprime mortgage crisis is a constant

financial crisis caused thru a dramatic escalation in mortgage negligence and

foreclosures in the United States, with major adverse effects on the banks and

financial markets all over the world. The crisis started in the year 2007 and has

revealed pervasive weaknesses in financial industry regulation and the global

financial system. Subprime mortgage is a financial innovation that normally occurs in

the situation which is relevant to the roots of subprime mortgage lending and the

existence of previously underserved borrowers and investors, the substance of

advances in technology and encouraging regulatory environment (Jaffee, 2008).

Furthermore, subprime mortgages are unsafe to the creditors and borrowers due

to the combination of high interest rates, bad credit history, and not clear about

personal financial situations often related with subprime applicants (Dell’Ariccia, Igan

and Laeven, 2009). The subprime mortgage market offers an almost ideal ground

for testing such theories because it is a less advanced credit market with significant


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informational irregularities. The USA financial crisis has a link between credit

growths and lending standards in the subprime mortgage market and also identifying

modifications in the structure of local credit markets as issues increasing this decline

in lending standards (Dell’Ariccia, Igan and Laeven, 2009).

Generally subprime mortgages would have an excessive risk of assessment

rating. However once the mortgage bundles got approved by other lenders, the

rating agencies offered these risky subprime mortgages a low risk rating.

Consequently, the financial system refused the extent of risk in their balance sheets.

These mortgages had an introductory duration of one to two years of very low

interest rates. At the end of this period, interest rates elevated. In 2007, the US was

required to raise the interest rates due to inflation. This approach showed that the

mortgage payment was very expensive.

On the other hand, many homeowners who had removed mortgages 2 years

earlier right now encountered ballooning mortgage payments as their introductory

period ended (Pettinger, 2011). Homeowners also encountered lower disposable

income due to developing health care costs, increasing petrol and food prices. This

triggered a rise in mortgage defaults; several new homeowners were unable to

afford mortgage payments. “A study in 2007 shows the monthly payments for 60%

of the total adjustable-rate mortgages created since 2004 will boost up by 25% of

more” (Sugunendran, 2008). These defaults indicated the end of US housing boom.

US house prices began to drop which started more mortgage problems. For

example, people with 100% mortgages now encountered unfavourable equity. It

signified that the loans were no longer secured (Pettinger, 2011). Even if the people

did default, the bank couldn’t ensure to collect the initial loan. A variety defaults

prompted many medium sized US mortgage companies to bankruptcies.

Figure 1: New

According to the Figure 1, The Traditional model Lending where banks grant

mortgage to the home buyer and the home buyer pays back to the bank but in the

subprime model lending bank sell mortgage bond to the mortgage bond market.

From this the bank obtains

home buyers pays back to the bank and the banks will pay back to the bondholders.

If one of them default any of

because it is a domino effect.


Figure 1: New Model of Mortgage Lending

Source: BBC News




From this the bank obtains credit to grant mortgage to the home buyer. Th


any of the payment everyone will start defaulting the payment

because it is a domino effect.


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credit to grant mortgage to the home buyer. Than this


the payment everyone will start defaulting the payment


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4.0 Subprime mortgage in United States

The subprime mortgage collapse which spread throughout the US economy and into

international markets. US mortgage lenders sold many inappropriate mortgages to

customers with low income and bad credit history record. It was estimated with a

booming housing market, the mortgages will remain economical. Nevertheless,

probably there were careless controls in the sale of mortgage products. The

mortgage brokers was paid for selling a mortgage because there was a benefit to

sell mortgages no matter if they were overpriced and might have high possibility of

default (Pettinger, 2011). In order to sell more profitable subprime mortgages where

mortgage companies included the debt into consolidation packages and sold the

debt to other finance companies. In other terms, mortgage companies borrowed in

order to lend mortgages. The lending was not financed through saving accounts, for

example. These mortgage debts were purchased by financial intermediaries. This

was to spread the risk but conversely it only just spread the dilemma.

Generally subprime mortgages would have an excessive risk of assessment

rating. However once the mortgage bundles got approved by other lenders, the

rating agencies offered these risky subprime mortgages a low risk rating.

Consequently, the financial system refused the extent of risk in their balance sheets.

These mortgages had an introductory duration of one to two years of very low

interest rates. At the end of this period, interest rates elevated. In 2007, the US was

required to raise the interest rates due to inflation. This approach showed that the

mortgage payment was very expensive.

On the other hand, many homeowners who had removed mortgages 2 years

earlier right now encountered ballooning mortgage payments as their introductory

period ended (Pettinger, 2011). Homeowners also encountered lower disposable

income due to developing health care costs, increasing petrol and food prices. This

triggered a rise in mortgage defaults; several new homeowners were unable to

afford mortgage payments. “A study in 2007 shows the monthly payments for 60%

of the total adjustable-rate mortgages created since 2004 will boost up by 25% of

more” (Sugunendran, 2008). These defaults indicated the end of US housing boom.


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US house prices began to drop which started more mortgage problems. For

example, people with 100% mortgages now encountered unfavourable equity. It

signified that the loans were no longer secured (Pettinger, 2011). Even if the people

did default, the bank couldn’t ensure to collect the initial loan. A variety defaults

prompted many medium sized US mortgage companies to bankruptcies.

Nevertheless, the losses weren’t confined to mortgage lenders. According to

Pettinger (2011) many banks lost billions of pounds during the bad mortgage debt

they had bought off US mortgage companies. Banks were required to write off large

losses which made them afraid to make any further lending, mainly in the now

dangerous subprime sector. The effect was worldwide which became very difficult to

increase funds and borrow money. Therefore, the cost of interbank lending has

increased significantly. Probably this made it very difficult to borrow any money after

all this. The markets dried up, hence impacted many firms who had been under the

subprime lending. It squeezed so many firms who now have difficulty borrowing

money. For example, biotech companies depend on ‘high risk’ investment and are

now unable to obtain sufficient funds (Pettinger, 2011). The slowdown in borrowing

has contributed to a slowing economy for the possibility of recession in the US.

It is anticipated that this subprime mortage might eventually last for a long time

due to house prices are still decreasing in the US, sinking the value of mortgage

loans. Several homeowners still encounter escalating interest rates, when their initial

periods come to an end. It also was difficult to recoup confidence in the financial

markets and the recession in the US and global downturn could cause a further rise

in bad loans.


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5.0 Causes of Subprime mortgage crisis

The subprime mortgage was first known early in 2007 however never really made its

appearance and in the later parts of 2007 leading to 2008, where it burst out and

caused significant damage to economies all over the world. There are various

causes however the subprime mortgage started in 2008.

5.1 Increase of housing bubble

The value or price of the US house amplified by 124% around 1997 and 2006

which allowed a lot of borrowers to be able to refinance their homes at lower

interest rates, and remove second mortgages secured by the price

appreciation (CrisisSite.com). However this collection of money

approximately doubled in amount, income generating from the investments

were unable to increase quickly.By 2003, the supply of mortgages begin at

traditional lending standards had been vanished entirely.

Graph 2: Subprime Mortgage Origination

Source: T2 Partners, LLC


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Furthermore strong demand regarding about Mortgage-backed security

and collateralized debt obligations started to drive down lending standards

which results it was difficult to maintain this speculative bubble. According to

the CrisisSite.com website by 2008 in the graph 2, there was a drop over

20% in the average US housing value.

5.2 The Waning of the Housing Market

Subprime mortgage caused by shrinkage in the market prices of previously

overinflated assets and defines the financial crisis that results from the drop

of prices. It is because of oversupply of housing stock, refinancing became

harder and the adjustable rates on mortgages kicked in, unleashing a wave of

defaults and foreclosures (Smith, 2008).The housing market which was a

great stimulating market of the US economy dropped to 5.25 million in 2007

as the average sales price dropped up to 4.2 percent with $211,700 (British

Broadcasting Corporation, 2007). This crucial decline in the housing market

triggered to an increase in the mortgage rates and homeowners found it very

difficult to obtain mortgages and change their homes using mortgages.The

effects of this were experienced beyond the regions of the United States due

to the credit risk no longer endure solely with US lenders however had been

transferred to investors all around the world (Smith, 2008).

5.3 The reckless and excessive lending

The reckless and excessive lending of subprime mortgage cause huge losses

for investors and lender’s the loans turn bad and the level of harmful debt

becomes obvious (Australian Property Forum, 2010). Banks might then

control the debt and increase the cost of debt by raising mortgage rates or

some other commercial rates. In critical cases, lenders were incapable of lend

money even though they wish to, because of their previous losses. There are

many factors identified which tend to cause lenders to prevent and reduce

their lending process. This resulted due to observation of bankruptcy risk in


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other investors and banks as well as the changes to monetary policy. At the

same time, governments may enforce new debt controls on the financial

system. BBC News (2007) stated that Washington Mutual is closed by US

government the largest failure of a US bank. Its banking assets are sold to

J.P Morgan Chase for US $1.9 billion.

5.4 Subprime lending

According to CrisisSite.com website there was a dramatic growth in U.S.

Subprime lending in the year 2004 to 2006. The borrowers with a bad credit

history faces a greater risk of defaulting loan than prime borrowers, made

good use of the easy credit regulation. This higher-risk lending also became

one of the main causes of U.S. subprime mortgage. For example, Bear

Stearns is US investment banks which controlled by Wall Street for

generations. BBC New (2009) stated that before the subprime mortgage

crisis, the bank had a market capitalization of $17 billion, assets under control

of $385 billion, and labor force of 15,000. The company had financed in sub-

prime mortgage instruments heavily and other securities which are extremely

risky and have collapsed suddenly in value.

Graph 3: Falling Value Market Capitalization of Bear Stearns

BBC New (2009) also stated that the collapse of its share price, from a

highest of $169 decline to $2, which means it, has losses beyond 98% of its

value in the stock market due to the

shows that in 17 March 2008 Bear S

JP Morgan Chase for $240m in a deal backed by $30bn of ce

loans.

5.5 The Central Banks Policy

Moseley (2009) stated that t

the financial system

central bank, the Federal Reserve, has made a dramatic involvement in

financial markets by reducing rates to 4.75% from 5.25% to prevent the US

economy which is already slowing down


3: Falling Value Market Capitalization of Bear Stearns

Source: NYSE



value in the stock market due to the subprime mortgage crisis

17 March 2008 Bear Stearns was bought by larger competitor

JP Morgan Chase for $240m in a deal backed by $30bn of ce

The Central Banks Policy

Moseley (2009) stated that the laws were modified and enforcement mad

the financial system to grow weak. BBC News (2007) stated that t



economy which is already slowing downthis can be seen in the graph below.


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3: Falling Value Market Capitalization of Bear Stearns



crisis. In graph 3

tearns was bought by larger competitor

JP Morgan Chase for $240m in a deal backed by $30bn of central bank

ere modified and enforcement made

(2007) stated that the US



this can be seen in the graph below.

The governments and central banks will react to the financial slowdown by

reducing interest rates rapidly and presenting risky asset market stimulus.

This stimulus might be financed by the getting hold of consta

government debt. When the central banks managed badly, this will result to a

renewed debt bubble even greater in quantity than the prior one

Tucker, 1993).

6.0 Effect of Subprime mortgage

When the subprime mortgage

and thisresulted downturn

economy. The transmission of several impact of United States subprime mortgage

crisis on Caribbean economic growth are

Foreign Direct Investment (FDI).


Graph 4: US Interest Rates

Sources: US Federal Reserve



This stimulus might be financed by the getting hold of consta


renewed debt bubble even greater in quantity than the prior one

Effect of Subprime mortgage toward Caribbean

subprime mortgage rises there is a reduction in availability of the credit

resulted downturn on the economic which cause a major effect on the world

The transmission of several impact of United States subprime mortgage

crisis on Caribbean economic growth are trade, tourism, remittances, finance and

Foreign Direct Investment (FDI).


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This stimulus might be financed by the getting hold of constantly more


renewed debt bubble even greater in quantity than the prior one (Clair &

there is a reduction in availability of the credit

a major effect on the world

The transmission of several impact of United States subprime mortgage

trade, tourism, remittances, finance and


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6.1 Trade

The failing of household consumption and business investment would directly

initiate a decrease of demand in the United States for foreign goods and

services. Such decreases are felt by countries with a huge share of their

exports to the United States (ECLAC, 2007). In 2006, 51% of the Caribbean

Community’s total exports of goods went to the United States market

(Economy Survey, 2008). It was significant for Caribbean countries that are

reliant on exports to progress their current account balances and foster

productive employment and growth (ECLAC, 2007). During the period from

2002 to 2006, Caribbean countries among the largest share of their exports to

the United States market are Bahamas, Belize, Trinidad and Tobago and St.

Kitts and Nevis with export percentages reaching from 32% to 62% (Economy

Survey, 2008). Therefore, these countries are affected by a slowdown in the

United States economy.

6.2 Tourism

Based on ECLAC (2007), tourism is a main revenue earner for a lot of

Caribbean countries subsidizing approximately 17 percent of GDP in

countries for instance the Bahamas and representing 60% of service export

of the Eastern Caribbean Currency Union (ECCU). About 29.9 million United

States outbound travellers, the Caribbean received 5.7 million or 19.2 percent

in 2006 (Economy Survey, 2008). The undesirable incomes results from the

subprime crisis and increased uncertainty because of recession.

Consequently it able to reduced travel demand from the United States and

affects the tourism sector. Besides that, the cost of travel is expensive as the

escalation oil prices that discouragement on travel (ECLAC, 2007). The

ECCU countries show extensive tourism sectors prior to aggregate output

than the other CARICOM countries. It might be most affected. During the

period 2002 to 2006, Anguilla, Antigua and Barbuda where the tourism was

reported for 23.6 percent and 21.7 percent of GDP (Economy Survey, 2008).

However, in the other countries the statistics are lesser approximately 8.8


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percent in Grenada to 15.8 percent in Saint Lucia (Economy Survey, 2008).

However, ECCU data for the first quarter of 2008 shows that an overall

improve in the number of visitors by 10.9% when compared with the first

quarter of 2007 about 4.1% (Economy Survey, 2008).Therefore, this appears

the tourism industry has not yet been negatively suffering from the slowdown

in the United States and that any impacts are commonly experienced during

the last quarter of 2008 (ECLAC, 2007).

6.3 Remittances

The Remittances because of the economic recession and the downfall of real

estate prices the construction sector which hires a huge number of

immigrants has been decreased. The remittance flows to the Caribbean

which including Cuba and Republic but however eliminating Belize, Guyana

and Suriname that is US$8.3 billion in 2006 (Economy Survey, 2008).

Remittances towards the country were mainly from the United States followed

by Western Europe. States like California, New York and Florida were the

main remittance states, thinking that the Caribbean has the same effect to

Latin America (ECLAC, 2007). The leisurelier job market and a housing-led

recession will then have a crucial effect on remittances when reduction of

jobs and limited income impact on immigrant home owners will transform into

less or no money to remit (ECLAC, 2007). During the period from 2003 to

2007, the effects of the slowdown in remittances are experienced especially

by the rural population in several Caribbean countries mainly in Guyana and

Jamaica even though remittances constituted 20.3% and 14.7% of GDP

(Economy Survey, 2008).

6.4 Finance and Foreign Direct Investment (FDI).

The United States economy has effect on Caribbean financial institutions.

Financial assets are less uncertainty rather than they were years ago and

several countries where involving Barbados which are approaching

investment status level (ECLAC, 2007). Besides that, the constant decline in


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interest rates in the United States creates the country attractive to capital

inflows to trigger the growth of asset prices. Conversely, entities like certain

central banks, commercial banks and others with investments and reserves

which are United States dollar denominated will definitely suffer capital losses

because of the devaluation of the dollar (ECLAC, 2007). The high levels of

uncertainty and the persistent bad update in the economy have triggered

foreign investors and creditors to anxiety financing which lead to in a credit

crunch. However most significantly, would the financial crisis get worse in the

United States as some experts fear, it will badly affect the global financial

system harming especially the other financial services reliant on Caribbean

countries (ECLAC, 2007). When it comes to ECCU countries, the weight of

the financial sector is higher in Anguilla that is 18.3 percent of GDP, St. Kitts

and Nevis are 14.1% and Dominica is 13.7 percent (Economy Survey, 2008).

7.0 Recommendation

As the Caribbean is actually uncertain to avoid the effect of a United States

recession, the following recommendations are targeted by permitting a soft cushion

towards this recession and expansion or reduce the potential reduction in economic

growth are:

7.1 Analysis other industry for their highest trades

To soften the effect of reduced import demand from the United States.The

CARICOM countries must analysis other industry for their highest trades. For

example, Trinidad and Tobago has to consider the trade of oil and gas to

China, Japan and India, where as Jamaica and Suriname must consider the

trade of bauxite and alumina to Canada and Europe (ECLAC, 2007).

However, there is required to develop the intraregional trade among

CARICOM countries by provided the statistic that intraregional trade in

domestic trades approximately 16 percent during the period 2004-2006, while

domestic trades to the United States about 52 percent during the same period

(ECLAC, 2007).


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7.2 Maximize their comparative advantage when it comes to their

geographical place

To reduce the downside effect on the tourism sector.The CARICOM countries

have to maximize their comparative advantage when it comes to their

geographical place. When compared with Europe and Asia, the Caribbean is

just five hours from the United States by air transportation and this gives an

opportunity for more reasonable and affordable tourism (Economy Survey,

2008). The low cost packages are commonly offered competitively in the

United States. The strength of the Euro currencies provides an excellent

opportunity to attract tourists from Europe which improves the aggressive

marketing (ECLAC, 2007).

7.3 Create a sustainable employment opportunities

There is a serious requirement for Caribbean governments appeared to be

proactive in creating sustainable employment opportunities, mainly for

individuals highly depending on remittances. The variation of the export

basket moving towards further value added items to increase employment

opportunities for Caribbean residents in the country thru the vertical

integration of industries associated to take advantage of resources (ECLAC,

2007). This will necessitate for active industrial policies on the Caribbean

governments.

7.4 The diversification of foreign reserves

The major consideration obviously is to provide the diversification of foreign

reserves through the country’s central and commercial banks. Reserves must

not only persist on United States dollar denominated but should include

combination of some other world currencies like the Sterling Pound and the

Euro (ECLAC, 2007).


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8.0 Conclusion

As a conclusion, we can bind that the subprime mortgage has been caused by

several reasons which had impacted the economy, financial institutions and

businesses operating within the economy quite severely; and this left with

considerable aftereffect to many. The main causes of the 2007 subprime mortgage

were identified as the increasing of housing bubble, the waning of the housing

market, reckless and excessive lending, subprime lending and Central Bank policy

while the effects of the subprime are quite critical for both the short and the long run.

The major effects of subprime mortgage toward Caribbean are trade, tourism,

remittances, finance and Foreign Direct Investment (FDI). The method and policies

that are being applied by Caribbean governments be determined bythe number of

factors. The countries that have advantage from commodity booms that permitted

them to accumulate financialreserves and international reserves are in a positive

position. The regulatory bodies and central banks also should plan a guiding

structure and a list of rules for precautions.


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9.0 References

Australian Property Forum. (2010, December 23). Retrieved January 27, 2010, from

The Credit Crunch Explained:

ustralianpropertyforum.com/blog/entry/3200746/4773/

BBC News. (2007, September 18). Retrieved 17, 2012, from Fed cuts interest rate

to 4.75%: http://news.bbc.co.uk/2/hi/business/6999821.stm

BBC News. (2009, August 7). Retrieved February 16, 2012, from Timeline: Credit

Crunch to downturn: http://news.bbc.co.uk/2/hi/7521250.stm

British Broadcasting Corporation. (2007, October 24). Retrieved February 2012, 24,

from Sharp Decline in US Housing Sales:

http://news.bbc.co.uk/2/hi/business/7060346.stm

Clair, R., & Tucker, P. (1993). Six Causes of the Credit Crunch. Economic Review,

1-20.

CrisisSite.com. (n.d.). Retrieved February 21, 2012, from Causes Of American Debt

Crisis: http://www.crisissite.com/answer-main-american-debt.html

Dell’Ariccia, G., Igan, D., & Laeven, L. (2009). Credit Boom And Lending Standards:

Evindence From The Subprime Mortgage Market. European Banking Center

Discussion Paper No. 2009–14S, pp.1-44.

DiMartino, D., & Duca, J. (2007, November). Federal Reserve Bank of Dallas.

Retrieved January 31, 2012, from The Rise and Fall of Subprime Mortgages:

http://dallasfed.org/research/eclett/2007/el0711.html

ECLAC. (2007). Retrieved April 13, 2012, from ECONOMIC SURVEY OF THE

CARIBBEAN :

http://www.eclac.cl/portofspain/noticias/noticias/8/32418/TheUnitedStatesSubpri

meMortgageCrisisanditsImplicationsfortheCaribbean.pdf


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Economic Survey. (2008). Retrieved April 13, 2012, from ECONOMIC SURVEY OF

THE CARIBBEAN: http://www.eclac.cl/publicaciones/xml/4/30224/L.138.pdf

Jaffee, D. M. (2008). The U.S. Subprime Mortgage Crisis: Issues Raised and

Lessons Learned. pp.1-50.

Moseley, F. (2009, April). International Socialist Review. Retrieved January 30,

2012, from The U.S. economic crisis: Causes and solutions:

http://www.isreview.org/issues/64/feat-moseley.shtml

Pettinger, T. R. (2011, March 12). MortgageGuideuk.co. Retrieved February 4,

2012, from Credit Crunch Explained:

http://www.mortgageguideuk.co.uk/blog/debt/credit-crunch-explained/

Smith, G. (2008, September 24). How the US Financial Crisis Impacts the

Caribbean.

Sugunendran, S. (2008). CreditCrunchDestroyer.com. Retrieved February 8, 2012,

from An Overview of the Credit Crunch:

http://creditcrunchdestroyer.com/articles/credit-crunch-an-overview/

Economy & Finance

Sania Mirza ( PDF )