Abated storm over US subprime mortgages or worse to come?

Andrew Cornford, who contributed this article, was formerly a senior UNCTAD economist and is currently research fellow at the Financial Markets Center.

Geneva, 16 May: The fallout from the bursting of the bubble of subprime mortgage financing in the United States continues. This now includes losses of US$900m at the home lending unit (ResCap) of GMAC, the financial services group in which General Motors has a stake of 49%, and losses of more than US$100m at UBS on its investments in subprime mortgages, losses which have led to closure of a recently established in-house hedge fund.