Dear All
Apologies if you knew this already but I thought it worthwhile to remind
people of the former Chair of the Federal Reserve Banks view of subprime
a couple of years ago.
"With these advances in technology, lenders have taken advantage of
credit-scoring models and other techniques for efficiently extending
credit to a broader spectrum of consumers. The widespread adoption of
these models has reduced the costs of evaluating the creditworthiness of
borrowers, and in competitive markets, cost reductions tend to be passed
through to borrowers. Where once more-marginal applicants would simply
have been denied credit, lenders are now able to quite efficiently judge
the risk posed by individual applicants and to price that risk
appropriately. These improvements have led to rapid growth in subprime
mortgage lending; indeed, today subprime mortgages account for roughly
10 percent of the number of all mortgages outstanding, up from just 1 or
2 percent in the early 1990s."
Chairman Alan Greenspan of the US Federal Reserve Bank - System's
Fourth Annual Community Affairs Research Conference, Washington, D.C.
April 8, 2005
Regards
Kirk Mann
For details of my recent publications please go to;
http://www.leeds.ac.uk/sociology/people/km.htm
For info re the Faculty or to search for a postgraduate supervisor
please go to http://www.leeds.ac.uk/essl/
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