Financial services innovator Carol Realini is the author of the recently published BankRUPT.
In this blog extract Carol assesses trust in banking:
Starting in late 2007, the most severe financial crisis most Americans under the age of eighty have ever experienced swept over the United States.
A primary cause of the meltdown was the subprime lending bubble. After growing for much of the first decade of this century, in 2007 the bubble collapsed. Real estate prices plummeted, loans defaulted, and foreclosures skyrocketed.
The “Subprime 25” were responsible for nearly a trillion dollars of subprime lending, or seventy-two percent of all reported high interest loans.
These were largely non-bank retail lenders, most of which were either owned outright by the biggest banks or former investment houses, or had their subprime lending financed by those institutions.
Between 2000 and 2007 underwriters poured $2.1 trillion into subprime mortgage-backed securities.
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