Subprime turmoil not over: OECD

Font Size

Print

Feedback

Email

Discuss

Related Articles

Oil hovers below $79 after 3-day slideOil spikes to USD 81.26 a barrelOil eases to USD 78.65 a barrelOil tops $80, highest since Oct 14, 2008

Budapest, Nov 15: The full global impact of the US subprime mortgage market crisis has yet to be felt although more information is needed to determine its full extent, OECD Chief Angel Gurria said in a speech in Budapest on Thursday. “I don’t think we have seen the end of the manifestations of the problem. I think we need more information about the impacts,” Gurria, Secretary-General of the Organisation for Economic Co-operation and Development, said.

He said the greatest impact of the recent turmoil was on confidence in the banking sector, which has not returned to normal, and said the crisis had accelerated an ongoing slowdown in the pace of global growth. “(The) greatest impact of subprime is on the confidence level, and multiplication of the impact on the whole financial system, which stopped giving loans to each other and to normalise this would take time,” Gurria said.

Banks including Citigroup, Merrill Lynch and UBS have announced colossal losses in recent weeks after a meltdown in securities linked to US subprime mortgages —loans made to borrowers ill-equipped to repay them For ordinary consumers, the impact will be felt next year.