Extent of losses caused by subprime crisis not known

SPEAKERS at a financial seminar in Dublin yesterday warned that the extent of the losses triggered by the subprime mortgage crisis, threatening to push the world into global recession, were still not fully known or understood.

Dr Patrick Dixon, author of several books on global business change, said the subprime crisis was “just one tiny fragment” of the lending crisis facing the banking sector.

It could be at least six months before the full extent of their exposure is ring-fenced and the losses are fully known. The bad debt crisis will be further affected by what “unfolds in the housing market in the United States over the next few months”, he said.