The subprime mortgage bust helped to trigger the nation’s recent financial crisis in its interaction with “more fundamental vulnerabilities,” Federal Reserve Chairman Ben Bernanke said Friday.
MarketWatch reports Bernanke, speaking at a New York conference, said subprime mortgage exposures were small relative to the size of the global market. The biggest decline in the housing market also came after the worst of the financial crisis, he said.
“Losses on subprime mortgages can plausibly account for the massive reaction seen during the crisis only insofar as they interacted with other factors … that served to amplify their effects,” Bernanke said.
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