2. What is Subprime Mortgage?
According to Dell’Ariccia, Igan and
Laeven, (2009) Subprime mortgages
are unsafe to the creditors and
borrowers due to the combination of
high interest rates, bad credit
history, and not clear about
personal financial situations often
related with subprime applicants
2
3. Subprime Mortgage in
United States 2007
New Model of Mortgage Lending
Source: BBC News 3
4. Causes Of Subprime Mortgage
Crisis
Increase of housing bubble
The Waning of the Housing Market
The reckless and excessive lending
Subprime lending
The Central Banks Policy
4
5. Effect Of Subprime Toward
Caribbean
Trade
Tourism
Remittances
Finance and Foreign Direct
Investment (FDI)
5
6. Recommendations
Analysis other industry for their highest
trades
Maximize their comparative advantage
when it comes to their geographical
place
Create a sustainable employment
opportunities
The diversification of foreign reserves 6
7. Conclusion
The subprime mortgage has been
caused by several reasons and
effected the Caribbean economy
and businesses operating.
The regulatory bodies and central
banks also should plan a guiding
structure and a list of rules for
precautions.
7
