The Great Subprime Credit Crisis and its Impact on Eastern Europe

The current global financial crisis is the worst the world has seen since the Great Depression during 1929-33. In 2008, clouds were gathering on the financial horizon. US house prices had peaked in 2006 and adjustable mortgage rates had risen, damaging the balance sheets of highly indebted households and undermining faith in mortgage-backed securities (MBS). It became evident that a variety of securitized assets, some quite highly leveraged, were far riskier than advertised.