After the banks tightened their belts and restricted mortgage lending, the protection industry braced itself for a downturn in business. Yet as Peter Carvill points out, the opposite appears to be happening - for now.
On 21 May 2004 at the Financial Services Roundtable Annual Policy Meeting in Chicago, the late Edward M Gramlich, the then-governor of the US Federal Reserve Board, outlined his fears about the increasing fashion for sub-prime lending that was, at that time, accounting for 10% of all the new mortgages in the US. "It has been associated," he said, "with higher levels of delinquency, foreclosure and, in some cases, abusive lending." Gramlich, who died in September 2007, had every reason to be wary of what he termed "lending that involves elevated credit risk". Just over two years after his ...
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