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The lenders then bundled these risky debts (sub-prime mortgages), and sold them to other lenders for more than they were worth -- debt that won't be repaid has no value at all.
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He blames Mr. Prince for taking on a mountain of risky debt that later proved toxic.
Worries about risky debt have been hitting other financial stocks this week.
But concerns about banks' exposure to such risky debt have led to strain in the European interbank markets.
These soaring interest rates on risky debt are, in effect, a prophecy of future troubles for the world economy.
Second, some of them might be carrying substantial amounts of relatively risky debt on their balance sheets.
"The default rate has gone up because a lot of risky debt was issued" in 1997 and early 1998.
market weak, and with bond investors willing to buy risky debt, buyout firms are turning to so-called dividend recapitalizations, The Wall Street Journal writes.
This pushed up yields on risky debt around the world (including in Europe) and caused the stock market to fall almost everywhere.
A bond insurer, the Ambac Financial Group, said it agreed to pay $850 million to settle one of its largest exposures to risky debt instruments called collateralized debt obligations.
With relatively risky debt, like securities backed by subprime mortgages, in disfavor in the market, the banks face the prospect of writing down some of their loan portfolios.
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CEO of Professional Science Editing for Scientists @ prosciediting.com