The Sub Prime Crisis : Implications for Emerging Markets
This paper discusses some of the key characteristics of the U.S. subprime mortgage boom and bust, contrasts them with characteristics of emerging mortgage markets, and makes recommendations for emerging market policy makers. The crisis has raised q...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/09/9877630/sub-prime-crisis-implications-emerging-markets http://hdl.handle.net/10986/6976 |
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okr-10986-6976 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
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English |
| topic |
ACCOUNTING ACCOUNTING STANDARDS AMORTIZATION ASSET CLASS ASSET MANAGERS ASSET-BACKED SECURITIES ASSET-BACKED SECURITY ASYMMETRIC INFORMATION BALANCE SHEET BALANCE SHEETS BANK ACCOUNTS BANK BALANCE SHEETS BANK BRANCHES BANK DEBT BANK LENDER BANK LENDERS BANK LENDING BANKING SYSTEM BANKRUPTCY BANKRUPTCY COURT BASIS POINTS BIDS BOND BOND MARKET BONDS BORROWER BROKER BROKERS CAPITAL ALLOCATION CAPITAL MARKET CAPITAL REQUIREMENTS CASH FLOW COLLATERAL COMMERCIAL BANK COMMERCIAL BANKS COMMERCIAL CREDITS COMMERCIAL PAPER CONFORMING LOAN CONSUMER PROTECTION CREDIBILITY CREDIT DEFAULTS CREDIT ENHANCEMENTS CREDIT HISTORIES CREDIT MARKET CREDIT PERFORMANCE CREDIT PROGRAMS CREDIT QUALITY CREDIT RATING CREDIT RATING AGENCIES CREDIT RATING AGENCY CREDIT RECORDS CREDIT RISK CREDIT SCORING CREDIT SPREADS CREDITWORTHINESS DEBT DEBT BURDENS DEBT OBLIGATIONS DEBT RATIOS DEBT SERVICE DEFAULT PROBABILITY DEFAULT RATE DEFAULT RATES DEFAULTS DEPOSITORY INSTITUTIONS DEPOSITS DEVELOPING COUNTRIES DISCLOSURE REQUIREMENTS DOMESTIC FINANCIAL MARKETS DUE DILIGENCE EMERGING MARKET EMERGING MARKETS EQUITY CONTRIBUTION EXPENDITURES EXTERNAL DEBT FEDERAL RESERVE FEE INCOME FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL RISK FINANCIAL SHOCK FINANCIAL SHOCKS FINANCIAL SYSTEM FINANCIAL SYSTEMS FORECLOSURE FORECLOSURES FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN INVESTMENT FRAUD GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GOVERNMENT BONDS HEDGE FUNDS HOLDING HOLDINGS HOME LOAN HOME OWNERSHIP HOMEOWNERSHIP HOUSEHOLD INCOME HOUSING FINANCE INCOME LEVEL INCOME TAX INCOME TAXES INDEBTEDNESS INFLATION INSTITUTIONAL INVESTORS INSURANCE INSURANCE CORPORATION INSURANCE PREMIUM INSURANCE PREMIUMS INTEREST EXPENSE INTEREST RATE INTEREST RATES INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL CREDIT INTERNATIONAL INVESTORS INVESTMENT BANK INVESTMENT BANKS INVESTMENT FUND INVESTMENT FUNDS INVESTMENT OPPORTUNITY INVESTMENT VEHICLES ISSUANCE LENDER LENDERS LENDING DECISIONS LENDING LIMITS LIEN LIENS LINES OF CREDIT LIQUIDITY LLC LOAN LOAN AMOUNT LOAN AMOUNTS LOAN BALANCES LOAN MATURITIES LOAN PORTFOLIO LOAN PORTFOLIOS LOAN PRODUCTS LOAN QUALITY LOAN TERM LOAN TERMS LOCAL CURRENCY MACROECONOMIC CRISES MARKET BENCHMARK MARKET CONDITIONS MARKET CONFIDENCE MARKET DEVELOPMENTS MARKET DISCIPLINE MARKET PARTICIPANTS MARKET PRACTICES MARKET PRICES MARKET REFORMS MARKET SHARE MATURITY MICROFINANCE MONETARY CONTROL MORAL HAZARD MORTGAGE MORTGAGE FINANCE MORTGAGE INTEREST MORTGAGE INTEREST RATE MORTGAGE INTEREST RATES MORTGAGE LOAN MORTGAGE LOANS MORTGAGE MARKET MORTGAGE MARKETS MORTGAGE-BACKED SECURITIES MORTGAGES NATIONAL BANKS PAYMENT DEFAULT PAYMENT DEFAULTS PAYMENT OF PRINCIPAL PORTFOLIO PORTFOLIOS PREPAYMENT PREPAYMENT RATES PREPAYMENTS PRICE RISK PRIMARY MARKET PRIME LENDING RATES PRIVATE FINANCIAL INSTITUTIONS PRIVATE INVESTMENT PROBABILITY OF DEFAULT PROFIT MARGINS PRUDENTIAL REGULATION PRUDENTIAL SUPERVISION RATES OF INTEREST REAL ESTATE LENDING REGULATORY SCRUTINY REGULATORY SYSTEM REINVESTMENT RESERVE FUNDS RESERVES RESIDENTIAL MORTGAGE RETURN RETURNS RISK MANAGEMENT RISK OF DEFAULT RISKY BORROWERS RISKY COLLATERAL SAVINGS ACCOUNTS SECONDARY MARKET SECURITIES SETTLEMENT SHORT MATURITIES STATE BANK SUPPLY OF CREDIT TAX TAX BENEFITS TAX CREDIT TAX DEDUCTION TAX EXEMPTIONS TAX INCENTIVES TAX POLICIES TAX POLICY TAX TREATMENT TOTAL DEBT TRADING TRANCHES TRANSACTION TRANSITION COUNTRIES TRANSPARENCY TREASURY TREASURY BILL UNDERWRITER UNDERWRITERS VARIABLE RATE YIELD SPREAD |
| spellingShingle |
ACCOUNTING ACCOUNTING STANDARDS AMORTIZATION ASSET CLASS ASSET MANAGERS ASSET-BACKED SECURITIES ASSET-BACKED SECURITY ASYMMETRIC INFORMATION BALANCE SHEET BALANCE SHEETS BANK ACCOUNTS BANK BALANCE SHEETS BANK BRANCHES BANK DEBT BANK LENDER BANK LENDERS BANK LENDING BANKING SYSTEM BANKRUPTCY BANKRUPTCY COURT BASIS POINTS BIDS BOND BOND MARKET BONDS BORROWER BROKER BROKERS CAPITAL ALLOCATION CAPITAL MARKET CAPITAL REQUIREMENTS CASH FLOW COLLATERAL COMMERCIAL BANK COMMERCIAL BANKS COMMERCIAL CREDITS COMMERCIAL PAPER CONFORMING LOAN CONSUMER PROTECTION CREDIBILITY CREDIT DEFAULTS CREDIT ENHANCEMENTS CREDIT HISTORIES CREDIT MARKET CREDIT PERFORMANCE CREDIT PROGRAMS CREDIT QUALITY CREDIT RATING CREDIT RATING AGENCIES CREDIT RATING AGENCY CREDIT RECORDS CREDIT RISK CREDIT SCORING CREDIT SPREADS CREDITWORTHINESS DEBT DEBT BURDENS DEBT OBLIGATIONS DEBT RATIOS DEBT SERVICE DEFAULT PROBABILITY DEFAULT RATE DEFAULT RATES DEFAULTS DEPOSITORY INSTITUTIONS DEPOSITS DEVELOPING COUNTRIES DISCLOSURE REQUIREMENTS DOMESTIC FINANCIAL MARKETS DUE DILIGENCE EMERGING MARKET EMERGING MARKETS EQUITY CONTRIBUTION EXPENDITURES EXTERNAL DEBT FEDERAL RESERVE FEE INCOME FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL RISK FINANCIAL SHOCK FINANCIAL SHOCKS FINANCIAL SYSTEM FINANCIAL SYSTEMS FORECLOSURE FORECLOSURES FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN INVESTMENT FRAUD GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GOVERNMENT BONDS HEDGE FUNDS HOLDING HOLDINGS HOME LOAN HOME OWNERSHIP HOMEOWNERSHIP HOUSEHOLD INCOME HOUSING FINANCE INCOME LEVEL INCOME TAX INCOME TAXES INDEBTEDNESS INFLATION INSTITUTIONAL INVESTORS INSURANCE INSURANCE CORPORATION INSURANCE PREMIUM INSURANCE PREMIUMS INTEREST EXPENSE INTEREST RATE INTEREST RATES INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL CREDIT INTERNATIONAL INVESTORS INVESTMENT BANK INVESTMENT BANKS INVESTMENT FUND INVESTMENT FUNDS INVESTMENT OPPORTUNITY INVESTMENT VEHICLES ISSUANCE LENDER LENDERS LENDING DECISIONS LENDING LIMITS LIEN LIENS LINES OF CREDIT LIQUIDITY LLC LOAN LOAN AMOUNT LOAN AMOUNTS LOAN BALANCES LOAN MATURITIES LOAN PORTFOLIO LOAN PORTFOLIOS LOAN PRODUCTS LOAN QUALITY LOAN TERM LOAN TERMS LOCAL CURRENCY MACROECONOMIC CRISES MARKET BENCHMARK MARKET CONDITIONS MARKET CONFIDENCE MARKET DEVELOPMENTS MARKET DISCIPLINE MARKET PARTICIPANTS MARKET PRACTICES MARKET PRICES MARKET REFORMS MARKET SHARE MATURITY MICROFINANCE MONETARY CONTROL MORAL HAZARD MORTGAGE MORTGAGE FINANCE MORTGAGE INTEREST MORTGAGE INTEREST RATE MORTGAGE INTEREST RATES MORTGAGE LOAN MORTGAGE LOANS MORTGAGE MARKET MORTGAGE MARKETS MORTGAGE-BACKED SECURITIES MORTGAGES NATIONAL BANKS PAYMENT DEFAULT PAYMENT DEFAULTS PAYMENT OF PRINCIPAL PORTFOLIO PORTFOLIOS PREPAYMENT PREPAYMENT RATES PREPAYMENTS PRICE RISK PRIMARY MARKET PRIME LENDING RATES PRIVATE FINANCIAL INSTITUTIONS PRIVATE INVESTMENT PROBABILITY OF DEFAULT PROFIT MARGINS PRUDENTIAL REGULATION PRUDENTIAL SUPERVISION RATES OF INTEREST REAL ESTATE LENDING REGULATORY SCRUTINY REGULATORY SYSTEM REINVESTMENT RESERVE FUNDS RESERVES RESIDENTIAL MORTGAGE RETURN RETURNS RISK MANAGEMENT RISK OF DEFAULT RISKY BORROWERS RISKY COLLATERAL SAVINGS ACCOUNTS SECONDARY MARKET SECURITIES SETTLEMENT SHORT MATURITIES STATE BANK SUPPLY OF CREDIT TAX TAX BENEFITS TAX CREDIT TAX DEDUCTION TAX EXEMPTIONS TAX INCENTIVES TAX POLICIES TAX POLICY TAX TREATMENT TOTAL DEBT TRADING TRANCHES TRANSACTION TRANSITION COUNTRIES TRANSPARENCY TREASURY TREASURY BILL UNDERWRITER UNDERWRITERS VARIABLE RATE YIELD SPREAD Gwinner, William B. Sanders, Anthony The Sub Prime Crisis : Implications for Emerging Markets |
| relation |
Policy Research Working Paper No. 4726 |
| description |
This paper discusses some of the key
characteristics of the U.S. subprime mortgage boom and bust,
contrasts them with characteristics of emerging mortgage
markets, and makes recommendations for emerging market
policy makers. The crisis has raised questions in the minds
of many as to the wisdom of extending mortgage lending to
low and moderate income households. It is important to note,
however, that prior to the growth of subprime lending in the
1990s, U.S. mortgage markets already reached low and
moderate-income households without taking large risks or
suffering large losses. In contrast, in most emerging
markets, mortgage finance is a luxury good, restricted to
upper income households. As policy makers in emerging market
seek to move lenders down market, they should adopt policies
that include a variety of financing methods and should allow
for rental or purchase as a function of the financial
capacity of the household. Securitization remains a useful
tool when developed in the context of well-aligned
incentives and oversight. It is possible to extend mortgage
lending down market without repeating the mistakes of the
subprime boom and bust. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Gwinner, William B. Sanders, Anthony |
| author_facet |
Gwinner, William B. Sanders, Anthony |
| author_sort |
Gwinner, William B. |
| title |
The Sub Prime Crisis : Implications for Emerging Markets |
| title_short |
The Sub Prime Crisis : Implications for Emerging Markets |
| title_full |
The Sub Prime Crisis : Implications for Emerging Markets |
| title_fullStr |
The Sub Prime Crisis : Implications for Emerging Markets |
| title_full_unstemmed |
The Sub Prime Crisis : Implications for Emerging Markets |
| title_sort |
sub prime crisis : implications for emerging markets |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/09/9877630/sub-prime-crisis-implications-emerging-markets http://hdl.handle.net/10986/6976 |
| _version_ |
1764401185574354944 |
| spelling |
okr-10986-69762021-04-23T14:02:32Z The Sub Prime Crisis : Implications for Emerging Markets Gwinner, William B. Sanders, Anthony ACCOUNTING ACCOUNTING STANDARDS AMORTIZATION ASSET CLASS ASSET MANAGERS ASSET-BACKED SECURITIES ASSET-BACKED SECURITY ASYMMETRIC INFORMATION BALANCE SHEET BALANCE SHEETS BANK ACCOUNTS BANK BALANCE SHEETS BANK BRANCHES BANK DEBT BANK LENDER BANK LENDERS BANK LENDING BANKING SYSTEM BANKRUPTCY BANKRUPTCY COURT BASIS POINTS BIDS BOND BOND MARKET BONDS BORROWER BROKER BROKERS CAPITAL ALLOCATION CAPITAL MARKET CAPITAL REQUIREMENTS CASH FLOW COLLATERAL COMMERCIAL BANK COMMERCIAL BANKS COMMERCIAL CREDITS COMMERCIAL PAPER CONFORMING LOAN CONSUMER PROTECTION CREDIBILITY CREDIT DEFAULTS CREDIT ENHANCEMENTS CREDIT HISTORIES CREDIT MARKET CREDIT PERFORMANCE CREDIT PROGRAMS CREDIT QUALITY CREDIT RATING CREDIT RATING AGENCIES CREDIT RATING AGENCY CREDIT RECORDS CREDIT RISK CREDIT SCORING CREDIT SPREADS CREDITWORTHINESS DEBT DEBT BURDENS DEBT OBLIGATIONS DEBT RATIOS DEBT SERVICE DEFAULT PROBABILITY DEFAULT RATE DEFAULT RATES DEFAULTS DEPOSITORY INSTITUTIONS DEPOSITS DEVELOPING COUNTRIES DISCLOSURE REQUIREMENTS DOMESTIC FINANCIAL MARKETS DUE DILIGENCE EMERGING MARKET EMERGING MARKETS EQUITY CONTRIBUTION EXPENDITURES EXTERNAL DEBT FEDERAL RESERVE FEE INCOME FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL RISK FINANCIAL SHOCK FINANCIAL SHOCKS FINANCIAL SYSTEM FINANCIAL SYSTEMS FORECLOSURE FORECLOSURES FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN INVESTMENT FRAUD GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GOVERNMENT BONDS HEDGE FUNDS HOLDING HOLDINGS HOME LOAN HOME OWNERSHIP HOMEOWNERSHIP HOUSEHOLD INCOME HOUSING FINANCE INCOME LEVEL INCOME TAX INCOME TAXES INDEBTEDNESS INFLATION INSTITUTIONAL INVESTORS INSURANCE INSURANCE CORPORATION INSURANCE PREMIUM INSURANCE PREMIUMS INTEREST EXPENSE INTEREST RATE INTEREST RATES INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL CREDIT INTERNATIONAL INVESTORS INVESTMENT BANK INVESTMENT BANKS INVESTMENT FUND INVESTMENT FUNDS INVESTMENT OPPORTUNITY INVESTMENT VEHICLES ISSUANCE LENDER LENDERS LENDING DECISIONS LENDING LIMITS LIEN LIENS LINES OF CREDIT LIQUIDITY LLC LOAN LOAN AMOUNT LOAN AMOUNTS LOAN BALANCES LOAN MATURITIES LOAN PORTFOLIO LOAN PORTFOLIOS LOAN PRODUCTS LOAN QUALITY LOAN TERM LOAN TERMS LOCAL CURRENCY MACROECONOMIC CRISES MARKET BENCHMARK MARKET CONDITIONS MARKET CONFIDENCE MARKET DEVELOPMENTS MARKET DISCIPLINE MARKET PARTICIPANTS MARKET PRACTICES MARKET PRICES MARKET REFORMS MARKET SHARE MATURITY MICROFINANCE MONETARY CONTROL MORAL HAZARD MORTGAGE MORTGAGE FINANCE MORTGAGE INTEREST MORTGAGE INTEREST RATE MORTGAGE INTEREST RATES MORTGAGE LOAN MORTGAGE LOANS MORTGAGE MARKET MORTGAGE MARKETS MORTGAGE-BACKED SECURITIES MORTGAGES NATIONAL BANKS PAYMENT DEFAULT PAYMENT DEFAULTS PAYMENT OF PRINCIPAL PORTFOLIO PORTFOLIOS PREPAYMENT PREPAYMENT RATES PREPAYMENTS PRICE RISK PRIMARY MARKET PRIME LENDING RATES PRIVATE FINANCIAL INSTITUTIONS PRIVATE INVESTMENT PROBABILITY OF DEFAULT PROFIT MARGINS PRUDENTIAL REGULATION PRUDENTIAL SUPERVISION RATES OF INTEREST REAL ESTATE LENDING REGULATORY SCRUTINY REGULATORY SYSTEM REINVESTMENT RESERVE FUNDS RESERVES RESIDENTIAL MORTGAGE RETURN RETURNS RISK MANAGEMENT RISK OF DEFAULT RISKY BORROWERS RISKY COLLATERAL SAVINGS ACCOUNTS SECONDARY MARKET SECURITIES SETTLEMENT SHORT MATURITIES STATE BANK SUPPLY OF CREDIT TAX TAX BENEFITS TAX CREDIT TAX DEDUCTION TAX EXEMPTIONS TAX INCENTIVES TAX POLICIES TAX POLICY TAX TREATMENT TOTAL DEBT TRADING TRANCHES TRANSACTION TRANSITION COUNTRIES TRANSPARENCY TREASURY TREASURY BILL UNDERWRITER UNDERWRITERS VARIABLE RATE YIELD SPREAD This paper discusses some of the key characteristics of the U.S. subprime mortgage boom and bust, contrasts them with characteristics of emerging mortgage markets, and makes recommendations for emerging market policy makers. The crisis has raised questions in the minds of many as to the wisdom of extending mortgage lending to low and moderate income households. It is important to note, however, that prior to the growth of subprime lending in the 1990s, U.S. mortgage markets already reached low and moderate-income households without taking large risks or suffering large losses. In contrast, in most emerging markets, mortgage finance is a luxury good, restricted to upper income households. As policy makers in emerging market seek to move lenders down market, they should adopt policies that include a variety of financing methods and should allow for rental or purchase as a function of the financial capacity of the household. Securitization remains a useful tool when developed in the context of well-aligned incentives and oversight. It is possible to extend mortgage lending down market without repeating the mistakes of the subprime boom and bust. 2012-06-04T15:09:17Z 2012-06-04T15:09:17Z 2008-09 http://documents.worldbank.org/curated/en/2008/09/9877630/sub-prime-crisis-implications-emerging-markets http://hdl.handle.net/10986/6976 English Policy Research Working Paper No. 4726 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |