Page 17 - The Banks Article

Fines

US house prices had peaked in April 2006, Thereafter, the
bursting of this US real estate bubble led to the financial

market meltdown, an unprecedented decline began that

affected the quality of the loans that had paid for them.
Banks like Lehman Brothers filed for bankruptcy and was

followed by US government bailing out other banks (See

Diagram 8). Likewise, the UK government had to step in and
bailout a number of UK banks.

Diagram 8 Timeline – (11)

“when the value of homes started falling and interest rates of

subprime mortgages increased, it became more difficult for

borrowers to refinance their loans. Packaged into so-called

mortgaged-backed securities (MBS) and marketed with positive
rankings from international ratings agencies, those toxic assets,

however, had already become hot sellers among investors all

over the world,” (11)