How did monetary transmission work? I will conclude by highlighting the challenges of exit from monetary easing. 2. The subprime crisis that emerged in the US housing mortgage market in 2007 snowballed into a global financial crisis, and a global economic recession followed. The financial landscape has changed significantly after the collapse of Lehman Brothers in September 2008.
The issuance of securities backed by mortgages in so-called "alt-A" pools – which consist of loans to borrowers who typically have higher credit scores than subprime borrowers but whose applications may have other risky attributes – declined markedly.