The Aftermath

Carnage in a subset of the mortgage market catches Wall Street, regulators and the Fed off guard, and a year later the markets are still reeling. Now the hard part: planting the seeds to foster growth of fees and revenue.

August 18, 2008

By May 2007, faultlines in the subprime market were becoming apparent. New Century had filed for bankruptcy and other mortgage lenders had been tripped up by problem loans—but the Fed chief, Ben Bernanke, told a banking conference in Chicago the financial markets are “better than regulators at allocating credit.” Days after the first meeting of New Century creditors, Bernanke said there was little chance problems in a subset of the multi-trillion dollar mortgage market would spill over into the broader financial system or the broader economy. What a difference a year makes.

The full article is available to IDD Magazine subscribers only

Already a print subscriber? As a print subscriber, you are entitled to online access. Please click here to activate your account.