The crisis began with defaulting subprime mortgages, and spread throughout the international financial system.
But during the summer, the volume of defaulting subprime mortgages was trivial compared with the banks' capital.
The mortgage crisis, which was set off by defaulting subprime loans last summer, has forced lenders to tighten their standards across the board in both Manhattan and the boroughs.
Few people worry that Uncle Sam will go the way of a defaulting subprime borrower because the government, unlike other debtors, can always print the money it needs.
Investors are going to be fleeing this sector, not least because of a spillover effect from defaulting subprime mortgages.
Private Bank's clients are not people about to default on subprime or adjustable-rate mortgages, and their deposits at the bank are growing, not shrinking.
Not only are average Americans defaulting on subprime loans, wealthier individuals who were relying on bonuses that never came through or who took out option adjustable-rate mortgages and must now face the skyrocketing monthly rates have also had to flee.
Loans not considered subprime often defaulted at higher rates than those classified as subprime.
As more and more subprime borrowers defaulted and as home prices continued to slide, MBSs based on subprime mortgages lost value, with dire consequences for the portfolios of many banks and investment firms.
Analysts have speculated that if insurers find themselves unable to pay capital and interest on defaulted subprime-related securities, it could lead to yet more write-downs as banks are left stranded without their guarantors.
Borrowers with the new breed of subprime loans defaulted at alarming rates, sending the economy into a tailspin.
