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Sub-prime bomb stoppable with risk analysis

Staff Reporter 1 minute read

The US sub-prime contagion was predictable ten months before it occurred if banks fund managers and insurers had utilised basic risk analysis, says Australian Reward Investment Alliance chief executive Steve Gibbs.

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Speaking with The Australian Financial Review, Gibbs indicated that while marginal borrowers made up only six per cent of the US mortgage market in 2003, by 2006 that figure had soared to 40 per cent – changes that should have triggered alarm throughout financial institutions’ risk analysis measures.

Sub-prime bomb stoppable with risk analysis
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