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    Sania Mirza ( PDF ) Sania Mirza ( PDF ) Document Transcript

    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403 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 mortgage2.0 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. 1|Page
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403 This starts whenmortgage lenders sanction loans to the borrowers who are not mortgage 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, s thinking that as the value of their homes increased and they will be capable of refinancethe properties (Smith, 2008) Unfortunately, the borrowers start to default Smith, 2008). on the home loans payment because it was expensive when the interest rate increased rapidly. Furthermore the borrower unable to refinance the properties as the housing bubble came to an end. The property value also diminished. Consequently, the lenders were unable to regain the money that they had invested previously on the money properties. Graph 1: Housing Activity Drops OffSources: National Association of Realtors; Census Bureau; authors’ calculations 2|Page
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403 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 markets 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 3|Page
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403informational irregularities. The USA financial crisis has a link between creditgrowths and lending standards in the subprime mortgage market and also identifyingmodifications in the structure of local credit markets as issues increasing this declinein lending standards (Dell’Ariccia, Igan and Laeven, 2009). Generally subprime mortgages would have an excessive risk of assessmentrating. However once the mortgage bundles got approved by other lenders, therating 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 lowinterest rates. At the end of this period, interest rates elevated. In 2007, the US wasrequired to raise the interest rates due to inflation. This approach showed that themortgage payment was very expensive. On the other hand, many homeowners who had removed mortgages 2 yearsearlier right now encountered ballooning mortgage payments as their introductoryperiod ended (Pettinger, 2011). Homeowners also encountered lower disposableincome due to developing health care costs, increasing petrol and food prices. Thistriggered a rise in mortgage defaults; several new homeowners were unable toafford 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% ofmore” (Sugunendran, 2008). These defaults indicated the end of US housing boom.US house prices began to drop which started more mortgage problems. Forexample, people with 100% mortgages now encountered unfavourable equity. Itsignified that the loans were no longer secured (Pettinger, 2011). Even if the peopledid default, the bank couldn’t ensure to collect the initial loan. A variety defaultsprompted many medium sized US mortgage companies to bankruptcies. 4|Page
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403 Figure 1: New Model of Mortgage Lending Source: BBC News According to the Figure 1, The Traditional model Lending where banks grantmortgage to the home buyer and the home buyer pays back to the bank but in thesubprime model lending bank sell mortgage bond to the mortgage bond market.From this the bank obtains credit to grant mortgage to the home buyer. Than this Thhome buyers pays back to the bank and the banks will pay back to the bondholders.If one of them default any of the payment everyone will start defaulting the paymentbecause it is a domino effect. 5|Page
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 304034.0 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. 6|Page
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403US house prices began to drop which started more mortgage problems. Forexample, people with 100% mortgages now encountered unfavourable equity. Itsignified that the loans were no longer secured (Pettinger, 2011). Even if the peopledid default, the bank couldn’t ensure to collect the initial loan. A variety defaultsprompted many medium sized US mortgage companies to bankruptcies. Nevertheless, the losses weren’t confined to mortgage lenders. According toPettinger (2011) many banks lost billions of pounds during the bad mortgage debtthey had bought off US mortgage companies. Banks were required to write off largelosses which made them afraid to make any further lending, mainly in the nowdangerous subprime sector. The effect was worldwide which became very difficult toincrease funds and borrow money. Therefore, the cost of interbank lending hasincreased significantly. Probably this made it very difficult to borrow any money afterall this. The markets dried up, hence impacted many firms who had been under thesubprime lending. It squeezed so many firms who now have difficulty borrowingmoney. For example, biotech companies depend on ‘high risk’ investment and arenow unable to obtain sufficient funds (Pettinger, 2011). The slowdown in borrowinghas 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 timedue to house prices are still decreasing in the US, sinking the value of mortgageloans. Several homeowners still encounter escalating interest rates, when their initialperiods come to an end. It also was difficult to recoup confidence in the financialmarkets and the recession in the US and global downturn could cause a further risein bad loans. 7|Page
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 304035.0 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 8|Page
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403 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 9|Page
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403 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. 10 | P a g e
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403 Graph 3: Falling Value Market Capitalization of Bear Stearns Source: NYSE 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 subprime mortgage crisis. In graph 3 crisis shows that in 17 March 2008 Bear Stearns was bought by larger competitor Stearns JP Morgan Chase for $240m in a deal backed by $30bn of ce central bank loans.5.5 The Central Banks Policy Moseley (2009) stated that t the laws were modified and enforcement made ere mad the financial system to grow weak. BBC News (2007) stated that the US t 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 downthis can be seen in the graph below. downthis 11 | P a g e
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403 Graph 4: US Interest Rates Sources: US Federal Reserve 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 constantly more government debt. When the central banks managed badly, this will result to a renewed debt bubble even greater in quantity than the prior one (Clair & Tucker, 1993).6.0 Effect of Subprime mortgage toward Caribbean When the subprime mortgage rises there is a reduction in availability of the credit and thisresulted downturn on the economic which cause a major effect on the world resulted economy. 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). 12 | P a g e
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 304036.1 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 13 | P a g e
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403 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 14 | P a g e
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403 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). 15 | P a g e
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 304037.2 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). 16 | P a g e
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 304038.0 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. 17 | P a g e
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 304039.0 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 18 | P a g e
    • CURRENT ISSUES IN INTERNATIONAL & OFFSHORE BANKING GB 30403Economic Survey. (2008). Retrieved April 13, 2012, from ECONOMIC SURVEY OF THE CARIBBEAN: http://www.eclac.cl/publicaciones/xml/4/30224/L.138.pdfJaffee, 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.shtmlPettinger, 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/ 19 | P a g e